Why Is Mexico Putting Tariffs on Chinese Imports? by Juan Pablo Villasmíl and Joseph Bouchard

17 Jan 2024

In their most recent article published by the Diplomat, Juan Pablo Villasmíl and Joseph Bouchard discuss the import tariffs imposed on Chinese imports by Mexico.

The tariffs are primarily targeted at steel and aluminum products, and this decision appears to be a response for the following reasons, as the authors state:

Mexico’s decision to impose tariffs on certain Chinese imports may be driven by increasing U.S. dissatisfaction with China’s economic influence in Mexico. The move is seen as an attempt by Mexico to address U.S. concerns and maintain a functional relationship with both major powers.

Mexico, heavily reliant on external trade, might find cutting ties with China unsustainable. The imposition of tariffs could be a concession to U.S. negotiators amid ongoing discussions about trade and security partnerships.

Additionally, Mexico could be seeking to increase state revenues amid a high deficit, with the tariffs helping generate funds and reduce the trade deficit with China.

Another strategic objective might be to nudge China toward a free trade agreement (FTA), signaling that tariffs will be lifted if such an agreement is negotiated. This could enhance Mexico’s bargaining position and potentially address its trade imbalance with China.

To this the authors add:

“An FTA could help facilitate these developments and put Mexico (and China) in a more favorable negotiating position. With the U.S. and other key Western economic partners nearshoring, Mexico might be looking to expand its trade with China without surrendering its bargaining power too swiftly. […] An FTA could alter the balance, and China now has the next move.”

You can find the full article here.

Image: MotionCenter – stock.adobe.com