Mexico is enacting sweeping tariffs on 1,400 categories of products, intending to protect its domestic manufacturing industries.
Tariffs on imported cars and auto parts will rise, up to 50%.
But even at those new, high tariff rates, cars built by Chinese brands will still be competitive in Mexico. Their factories in China are far more efficient than competitors’.
American carmakers such as General Motors, however, face a serious challenge. Most of the cars sold by GM in Mexico are built in China, but at far higher costs than comparable Chinese brands, also building in China for export to Mexico.
Chinese companies in other industries are scaling back investments in Mexico, and instead are considering expansion in Vietnam.
Closing scene, the China-Pakistan Economic Corridor
Resources and links:
Made-in-China Chevys for $17,000 Are Winning Fans in Mexico
Chinese Carmakers May Keep Price Edge Despite Mexico Levies
Bloomberg, Mexico Tariff Plan Is Stopping Chinese Investment, Says Chamber
Sheinbaum aims to calm China tensions after tariff plan backlash