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

## China Warns Mexico Over Proposed Car Tariff Hike

China is warning Mexico to reconsider its plan to significantly increase tariffs on cars imported from Asia, potentially leading to trade tensions between the two nations. Here’s a breakdown of the situation:

• **Mexico’s Plan:** Mexico intends to raise tariffs on vehicles from Asia, particularly China, from 20% to 50%. This move still requires Congressional approval.
• **China’s Response:** China’s Ministry of Commerce expressed strong concern, urging Mexico to be cautious and consider the potential impact on their economic cooperation. They also stated they would take measures to protect their interests.
• **Trade Context:** Mexico benefits from the USMCA trade agreement with the U.S. and Canada, which requires a higher percentage of vehicle parts to be made in the region.
• **Investment in Mexico:** Chinese companies have invested billions in Mexico’s auto industry, with over 20 companies announcing investments since 2022.
• **Market Share:** Chinese car exports to Mexico have been growing, often at the expense of other Asian brands.
• **Potential Impact:** Experts suggest that even with increased tariffs, the value proposition of Chinese cars may remain strong.

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