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, potentially leading to trade tensions between the two nations. Here’s a breakdown:

• Mexico’s Plan: Mexico intends to raise tariffs on Asian-made cars, particularly from China, to 50% from the current 20%. This is part of a broader budget proposal affecting billions in imports.
• China’s Response: China’s Ministry of Commerce has warned Mexico to reconsider, emphasizing the importance of their trade relationship. They stated they will “resolutely safeguard its legitimate rights and interests” and may take countermeasures.
• Context of USMCA: Mexico benefits from the USMCA trade agreement with the US and Canada, which requires a higher percentage of vehicle parts to be made within the region.
• Industry Impact: Mexico’s auto industry is a major employer. Experts note the tariffs are lower than those imposed by Russia.
• Investment in Mexico: Chinese companies have invested billions in Mexico’s auto sector, with the country being a top destination for Chinese car exports.
• Market Dynamics: Experts suggest Chinese cars are taking market share from other Asian brands in Mexico. Even with potential tariffs, the value proposition of Chinese cars may remain strong.

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