China warns Mexico to ‘think twice’ before raising tariffs, threatens countermeasures

## China Warns Mexico Over Planned Car Tariffs

China is expressing strong disapproval of Mexico’s plan to significantly increase tariffs on cars imported from Asia, particularly China. Here’s a breakdown of the situation:

• Threat of Countermeasures: China’s Ministry of Commerce has warned Mexico of potential retaliatory measures if the country proceeds with its plan to raise tariffs on Asian-made cars to 50%.
• Trade Partnership at Risk: China emphasized the importance of its trade relationship with Mexico and expressed concern that the tariff increase could negatively impact economic cooperation.
• Mexico’s Plan: Mexico intends to raise tariffs on vehicles from Asia, primarily China, from the current 20% to 50%. This plan requires Congressional approval and would take effect 30 days later.
• China’s Justification: China views the planned tariffs as a threat to free trade and a potential consequence of U.S. trade practices.
• Broader Context: The proposed tariffs are part of a larger budget proposal affecting $52 billion worth of Mexican imports.
• USMCA Influence: Mexico benefits from the USMCA trade agreement, which requires a greater portion of a vehicle to be manufactured within the region.
• Industry Impact: Mexico’s auto industry is a major employer. Experts note that the tariffs, while significant, are lower than those imposed by Russia.
• Market Dynamics: Chinese car exports to Mexico have been growing, often taking market share from other Asian brands. Some analysts believe the value proposition of Chinese cars may remain intact even with increased tariffs.
• Investment in Mexico: Chinese companies have invested billions in Mexico’s auto industry, though some projects, like a BYD factory, are still pending.

For more details, you can read the original article on CNBC: [https://www.cnbc.com/2024/08/02/china-warns-mexico-over-planned-car-tariffs.html](https://www.cnbc.com/2024/08/02/china-warns-mexico-over-planned-car-tariffs.html)