In the short term, companies will face enormous difficulties in finding alternatives to Chinese goods and parts. Donald Trump has suggested the possibility of completely reevaluating the Trade Agreement between the United States, Mexico, and Canada in 2026, in addition to imposing additional tariffs on Mexico, with the intention of preventing the export of Chinese vehicles to the United States through Mexico.
Marcelo Ebrard, Mexico's Foreign Minister, has warned Deere & Co. about potential tariffs if they move a plant to Mexico, which could affect the nearshoring process aimed at attracting millions of dollars in investments to the country. The current treaty and its predecessor, NAFTA, have benefited the Mexican manufacturing sector, which currently employs about 5 million people.
Enrique Dussel Peters, coordinator of the China-Mexico Studies Center at UNAM, expressed that the U.S. pressure on Mexico regarding China is generating uncertainty for already firmly established investments. Meanwhile, Chinese companies continue to establish factories in Mexico.
In a strategy that aims at a possible response to China's policies, President Claudia Sheinbaum is showing a willingness to collaborate with the U.S. on issues such as immigration control and easing tensions with China, without losing her determination. She is the first Mexican leader to attend a G20 summit since 2018, which puts her role at stake in the potential developing global trade war.
On the other hand, Mexico has rejected a Chinese company, Ganfeng Lithium, following the nationalization of lithium mining by AMLO's government, depriving it of a project valued at over one billion dollars. With the intention of reducing Chinese imports, which represent about 20% of the national total, Sheinbaum has taken measures through her cabinet to address this challenge.
Despite her differences with Trump, so far, Sheinbaum has avoided making Chinese investments in Mexico difficult, showing her interest in maintaining a stable situation. It seems her current focus is on avoiding conflicts and maintaining a balance in international trade relations.
