By South China Morning Post | Created at 2024-11-26 08:18:17 | Updated at 2024-11-26 10:20:06
2 hours ago
Fears and uncertainties are quickly spreading among Chinese-funded companies in Mexico after US president-elect Donald Trump said that he would impose a 25 per cent tariff on imports from the Latin American country.
Industrial estates in the northern manufacturing hub of Monterrey, though, had already felt the chill. They used to welcome Chinese delegations almost every day, with new factories sprouting in mere months from the land the visitors had acquired, but such passion started to tail off earlier this year.
That followed Trump’s previous threats during his election campaign, as he repeatedly said he would stop Chinese-funded factories in Mexico from sending cars to the United States tax free – something that has yet to happen – by imposing 100 per cent tariffs.
“Most have turned to waiting and watching,” said the manager of one Chinese-funded factory in the city, who asked not to be identified. “[Trump] talks a lot, it depends on how he does it.”
The wave of Chinese companies venturing into Mexico started just because of Trump, who initiated a trade war with China during his first term. The high tariffs imposed on made-in-China goods benefited the Latin American country, where products that meet certain rules of origin can enter the American market with zero tariffs and much lower freight costs.
“If I were to advise Chinese companies thinking about investing in Mexico right now, my advice – which is contrary to what I did during the six years I was in China trying to bring investment into Mexico – would be ‘stop and wait’,” said Jorge Guajardo, a former Mexican ambassador to China and now a partner at DGA Group, a global business advisory firm.
“With regards to Chinese companies in Mexico, the way I’ve been thinking is that ‘Made by China’ is the new ‘Made in China’.”
