Chinese companies that considered Mexico a good place to establish their factories have had to rethink their investment plans due to the tariff threats imposed by U.S. President Donald Trump. The latter has expressed his intention to impose a 25 percent tariff on Mexico and Canada if they do not cooperate in stopping illegal immigration and the trafficking of fentanyl into the U.S.
The implementation of the tariffs against Mexico was scheduled for February 4, but was postponed thanks to an agreement reached by Mexico City’s government leader, Claudia Sheinbaum, with Donald Trump, thus delaying the economic measures for a month. Subsequently, Trump signed an executive order announcing a 25 percent tariff on U.S. imports of steel and aluminum.
A Chinese auto parts company established in Nuevo León has expressed its concern about Trump's tariff policies, stating that they might relocate production outside Mexico if these policies continue. Developers and owners of industrial parks also foresee a slowdown in foreign investments in Mexico due to the tariff threats.
Jennifer Wang, a senior partner at AllBright Law, mentioned that the tariffs would complicate the investment landscape for Chinese companies, forcing them to reconsider production locations and supply chain routes. Despite hopes that the measures are temporary, uncertainty persists.
Mexico has been seen as an attractive destination for Chinese investments, not only because of its proximity to the United States but also due to the USMCA trade treaty that allows tariff-free imports under certain criteria, and the affordable labor. Despite the growth in Chinese investments in Mexico since the pandemic, the imposition of tariffs could change the landscape.
Chinese companies have explained that their arrival in Mexico was due to supply chain disruptions caused by the pandemic and the trade war between the U.S. and China. Although Chinese investments have increased in Mexico in recent years, uncertainty surrounding the tariffs proposed by Trump could change the scenario.
