China Vows "Necessary Measures" if Mexico Hike Tariffs to Up to 50%

TMTPOST -- China on Thursday warned it would take forceful response if Mexico follows through on it plan to hike tariffs on cars and other imports to as much as 50%.

Credit：U.S. Federal Reserve Bank of Dallas

China hopes Mexico will proceed with extreme caution and think twice before making any tariff adjustment as China is not willing to the economic and trade cooperation between two countries affected, a spokesperson for the Ministry of Commerce (MOFCOM) said late Thursday, noting both sides are mutually important economic and trade partners.

The spokesperson made the remarks when responding to media reports that Mexico is planning to increase import tariff rates on about 1,400 items from countries that have not signed free trade agreements with it, including China, according to the state news agency Xinhua.

China will closely monitor Mexico's tariff moves and carefully evaluate any final measures, said the spokesperson, suggesting Mexico could face China’s countermeasures once it moves forward its new tariff plan. China will take necessary measures based on actual circumstances to resolutely safeguard its legitimate rights and interests, the person said.

The spokesperson stressed Beijing’s stance, stating China has consistently advocated for resolving economic and trade disputes through equal dialogue and consultation. "We oppose all forms of unilateralism, protectionism and discriminatory measures, as well as any actions that harm China's interests," said the person.

Given widespread global opposition to the unilateral tariff impositions by the United States, all countries should strengthen communication and coordination to jointly defend free trade and multilateralism, and should not sacrifice any third party interests due to external coercion, according to the spokesperson. In this context, any unilateral tariff measures taken by Mexico, even if within the framework of World Trade Organization (WTO) rules, will be regarded as appeasement and compromise towards unilateral bullying, according to the person.

Mexico’s planned tariffs, once implemented, will not only hurt the interests of relevant trading partners, including China, but also severely undermine the certainty of Mexico's business environment and reduce enterprises' confidence in investing in Mexico, the spokesperson warned.

China’s Foreign Ministry earlier Thursday slammed Mexico’s planned move as well.

“China advocates a universally-beneficial and inclusive economic globalization, opposes all forms of unilateralism, protectionism and discriminatory and exclusive measures, and firmly rejects moves that are taken under coercion to constrain China or undermine China’s legitimate rights and interests under any pretext,” said Lin Jian, the ministry’s spokesperson. “We will firmly protect our rights and interests in light of the developments of the situation. “

Noting China-Mexico economic and trade cooperation is win-win, Lin urged Mexico to l work with China to jointly advance world economic recovery and the development of global trade. He added China attaches great importance to its relations with Mexico.

The Mexican government on Wednesday said it is planning to raise import taxes on more than 1,400 goods from Asian countries to as much as 50%. The plan still needs to be approved by Congress, where the government holds a significant majority.

The Economy Ministry said tariffs will rise on textiles, steel, cars and another goods, affecting $52 billion in imports. Among them, imports of steel, toys and motorcycles will face a 35% tariff rate, and textiles will see levies between 10% and 50%.

The tariffs will impact countries that do not have trade deals with Mexico, especially China, South Korea, India, Indonesia, Russia, Thailand and Turkey, according to the Economy Ministry. The planned tariffs would be applied to 8.6% of of what Mexico buys abroad, said the minister Marcelo Ebrard.

"They already have tariffs," Ebrard told reporters when asked about the import levies on Chinese cars, which are currently 20%. "What we will do is raise them to the maximum level allowed” under the WTO rules. Ebrard said the measures were intended to protect jobs in Mexico as Chinese cars were entering the local market "below what we call reference prices." "Without a certain level of protection, you almost can't compete," he said.

Mexican President Claudia Sheinbaum on Thursday said her government doesn’t “want a conflict” with countries on which it plans to increase tariffs, including China.The measures were intended to boost Mexico's economy and the government was in talks with ambassadors from countries impacted by the proposed measures, Sheinbaum told a morning press conference.