BUSINESS

Trump Tariff Hike on Mexico Would Hurt Chinese Investments, Experts Say

By Li Rongqian, Zou Xiaotong and Wang Xintong

Published: Dec. 26, 2024 7:24 p.m. GMT+8

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The number of Chinese-funded firms registered with official agencies in Mexico now exceeds 20,000, up from about 2,000 in early 2020.

U.S. President-elect Donald Trump has said he will slap 25% tariffs on imports from Mexico, a move that experts say could jeopardize Chinese companies’ investments in the country while increasing prices for American consumers and hurting the broader economy.

The golden age for Chinese companies investing in Mexico may be coming to an end, Liu Xuedong, a professor at the National Autonomous University of Mexico, told Caixin.

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Explore the story in 30 seconds

Donald Trump plans to impose a 25% tariff on imports from Mexico, potentially affecting Mexican investments by Chinese companies and raising prices for U.S. consumers.
USMCA efforts and trade tensions with China didn't boost U.S. manufacturing as intended, prompting Trump's proposed tariff.
The new tariffs are expected to significantly impact U.S. consumers, inflating manufacturing costs and possibly fueling inflation across North America due to the intertwined economies relying on Chinese inputs.

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Who’s Who

Truth Social: Truth Social is a social media platform launched by former U.S. President Donald Trump. He uses it to communicate directly with his followers and make announcements, such as the planned 25% tariffs on imports from Mexico and Canada mentioned in the article. The platform serves as a key outlet for Trump since he was banned from other mainstream social media platforms.

Duke Shipping Agency: Duke Shipping Agency's Chief Operating Officer, Zhang Huafeng, expressed concerns about Trump's planned tariff hikes, stating they will create significant uncertainty for Chinese companies investing in Mexico. He questioned Mexico's continued viability as a springboard for these companies under such conditions.

Winbridge Business Group: Winbridge Business Group is a consultancy co-founded by Arturo Barajas. In the article, Barajas comments on the impact of potential U.S. tariffs on imports from Mexico, noting the dependence of Mexico's automotive and electronics industries on Chinese investment and technology. He highlights that these tariffs would significantly affect manufacturing and trade relationships between Mexico, the U.S., and China, with implications for U.S. consumer costs and the broader economy.

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What Happened When

2018：: The Trump administration began levying a 25% tariff on $34 billion worth of Chinese goods.

Early 2020：: The number of Chinese-funded firms registered in Mexico increased to over 20,000, up from about 2,000.

July 2020：: The United States-Mexico-Canada Agreement (USMCA) took effect.

Late November 2024：: Trump announced that on January 20th, 2025, he will sign an Executive Order to charge Mexico and Canada a 25% tariff on all products coming into the United States.

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