Mexican lawmakers to debate China tariffs proposal, may soften blow on steel and auto parts.
Mexican lawmakers are slated to begin debate this week on a bill to raise tariffs on goods from China and other Asian countries, three ruling party lawmakers told Reuters, amid fierce opposition from China and Mexican business groups.
The proposal would raise tariffs by up to 50% on imports of automobiles, textiles, clothing, plastics, steel and other products from China and other Asian countries that do not currently have a trade pact with Mexico, including India, South Korea, Thailand, and Indonesia.
Mexico’s Economy Ministry first outlined the proposed tariffs in September but the initiative struggled to gain widespread support in Congress, despite the ruling Morena party and its allies holding a significant majority.
President Claudia Sheinbaum’s administration says the measure aims to strengthen productive capacity, protect national employment and ensure that Mexico competes fairly in the global market addressing trade imbalances with China.
“During these last few years our country faced trade distortions, unfair practices, and a growing dependence on imported inputs that affected national productive sectors,” said Ricardo Monreal, the lower house leader for the ruling Morena party, on social media on Friday.
The proposal would also bring an additional 70 billion pesos ($3.76 billion dollars) to state coffers, Deputy Minister for Revenues Carlos Lerma said in September as the government was preparing the measure.
Neither Sheinbaum’s office nor the Economy Ministry responded to requests for comment.
A sense of urgency
Sheinbaum met privately at the National Palace with allies and legislators from her Morena party in late November and urged them to approve the bill before the end of the year, four sources familiar with the meeting told Reuters.
“The instructions were to pass it before the congressional session ends on December 15,” one of the sources said.
This person, like the other sources, requested anonymity to discuss sensitive political matters and a private meeting that has not been previously reported.
“There is a sense of urgency within the administration to get this done before the end of the year,” the source added.
Two of the sources said that the proposal to be taken up by lawmakers this week might be softer than the original bill, which stalled in the lower house of Congress this fall in the face of intense opposition from China and business groups.
Industry associations have warned that the proposed tariffs would significantly increase production costs, given their heavy reliance on Chinese imports of machinery, components, and raw materials.
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Source: Reuters
