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

BEIJING — China's Ministry of Commerce has warned Mexico of countermeasures arsenic the state plans to hike tariffs connected Asia-made cars to 50%.

We "hope Mexico volition beryllium highly cautious, and think doubly earlier acting," the ministry said successful a connection precocious Thursday, translated by CNBC.

"China and Mexico are mutually important commercialized partners," the ministry said. "We are not consenting to spot some sides' economical practice affected by this situation."

Mexico's Secretary of Economy Marcelo Ebrard told reporters Wednesday that the state planned to rise tariffs connected vehicles coming from Asia, peculiarly China, to 50% from the existent 20%. The accrued duties inactive request Congressional approval, and the tariffs would instrumentality effect 30 days later, helium said.

"China volition instrumentality indispensable measures ... to resolutely safeguard its morganatic rights and interests," China's connection read.

In the ongoing commercialized tensions with the U.S., China's countermeasures person included restrictions connected exports of minerals captious to the accumulation of cars and different precocious technology. Chinese companies person travel to predominate the proviso concatenation for galore of those minerals.

Sitting connected the confederate borderline of the U.S., Mexico benefits from the United States-Mexico-Canada Agreement (USMCA) for tariff-free commercialized among the countries. But USMCA, which took effect successful 2020, requires a acold greater information of a conveyance to beryllium made successful the region than the North American Free Trade Agreement statement it replaced.

Mexico's car manufacture is the country's largest employer, Jorge Guajardo, Washington, D.C.-based spouse astatine Dentons Global Advisors, antecedently told CNBC. He is simply a erstwhile ambassador of Mexico to China.

From June 2022 to July 2024, more than 20 Chinese car parts and manufacturers person announced implicit $7 cardinal successful investments successful Mexico, according to the Coalition for a Prosperous America, an advocacy group.

It's unclear however galore of the projects person been completed. Chinese electrical car elephantine BYD has notably not yet built a long-awaited mill successful Mexico.

The cardinal American state has been China's top destination for car exports, according to China Passenger Car Association figures earlier this year.

"The happening that's precise important astir Chinese autos is that wherever they're taking marketplace share, a batch of times, it's not truly from the Western brands. It's truly from the different Asian brands. I deliberation that's what we've seen successful Mexico," Eugene Hsiao, Macquarie Capital, caput of China equity strategy, said connected CNBC's "The China Connection" earlier this week, up of Mexico's latest tariff announcement.

But adjacent with hints of a 25% summation successful duties astatine the time, Hsiao said that helium expected "the worth proposition for a batch of these Chinese cars, I think, remains intact, adjacent with immoderate of these tariffs."