Mexico’s Senate has approved tariffs of 5-50% on imports from China and other parts of Asia.
The duties will hit Asian countries that don’t have trade deals with Mexico, including China, India, South Korea, Thailand and Indonesia.
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Automobiles (Light Vehicles): 50% (up from 20%)
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Textiles and Clothing generallly 35% (this was a big focus of the bill)
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Steel and Aluminum: 35% (with some at 50%)
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Footwear, Plastics, and Glass: 35%
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Electronics and Appliances: Mixed (5% – 35%) –
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Some inputs and specific parts were “softened” to lower rates (5% to 10%) to avoid hurting Mexican assembly plants, while finished consumer appliances likely face the 35% rate.
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This is starting to look like a bid to get a deal with Trump but note that the original proposal was much harsher. From the US perspective though, all I see is a shift in manufacturing to Mexico from China. If that’s the case, then maybe hurting China was the real strategy all along.
What’s starting to take shape is a US-led fortress North America strategy or perhaps all the Americas. What’s notable is South Korea getting cut out, which is/was a strong US ally. That could further fears that the US is abandoning Asia to China.
This strategy could beg for retaliation from China to Mexico. It also puts Canada in a tough place unless it can get zero tariffs from the US.
This article was written by Adam Button at investinglive.com.
