US pressures Mexico to reduce trade with China

The note is brutal: “The Government of Mexico, under pressure from the United States, keeps Chinese car manufacturers at bay by refusing to offer them incentives, such as low-cost public land or lower taxes, for investment in the production of electric vehicles” .

On April 18, the newspaper Reforma published information based on a telegram from the Reuters Agency that reveals a strategy that is altering the bilateral relationship between the two countries, but, above all, that transgresses the spirit of free trade and Mexican laws on the matter. : pressure from the United States on Mexico to close the door to Chinese investments.

According to published information, officials at the Secretary of Economy and Foreign Affairs have received from their counterparts at the departments of Commerce, State and the Office of the United States Trade Representative their fears that Chinese automakers will establish their electric vehicle production in Mexico. In one of the meetings, the note states, Mexican authorities made it clear that they would not provide incentives to Chinese investors and, therefore, would leave them outside the North American free trade zone.

On the other hand, during a campaign event at the headquarters of the United Steelworkers union in Pittsburgh, Pennsylvania, President Joe Biden promised to promote competition investigations against countries and importers that facilitate the entry of Chinese steel and, bluntly, reported that his government works with Mexico to ensure that Chinese companies do not evade tariffs by sending steel to our country and then exporting it to the United States. Certainly, the poisoned dart that Joe Biden launched, although it includes a high electoral charge, is part of a strategy. which the United States government has been implementing for some time, with the aim of exerting pressure to stop Chinese investments in key economic sectors of its main trading partner.

With the collaboration of Enrique Dussel Peters, coordinator of the Center for China-Mexico Studies at UNAM, we outline the context, the consequences, and the reactions derived from this episode that puts the bilateral relationship between Mexico and the United States on muddy ground:

Since 2022, North American officials Janet Yellen (Secretary of the Treasury), Jake Sullivan (National Security Advisor) and Katherine Tai (Trade Representative) have reiterated that the China factor is one of the most delicate risks in their national security strategy , so much so that they launched a complete attack to prevent Chinese investments from entering their territory and not hiding under the shelter of any of their trading partners. With this, the message between the lines is blunt: ‘you are with me in my strategy against China or, otherwise, you will suffer the consequences in trade, investments, etc., etc.’.

The United States, given these circumstances, is not necessarily looking at the phenomenon of nearshoring as the rest of the world observes and celebrates. For the Joe Biden administration, global supply chains are strategic, but only under certain conditions; that is, as long as they do not threaten your national security. That said, it’s not nearshoring, it’s security shoring.

Thus, the power historically recognized for its defense of the free market is trying to impose its legislation on the matter against China on third countries. In Mexico, for example, the Chinese automotive industry is gaining market penetration and this is one that is in the US government’s sights. Therefore, there is no need to think about it: we are facing an openly illegal act. Under this criterion and to cite one case, what power would the United States have to ask Mexico to close its doors to a Chinese car manufacturer? If this is now, what’s next?

Under these circumstances, an ever-increasing fireball is on the way. Today, American “diplomacy” thunders against Chinese car manufacturers and the steel industry. Tomorrow, it will operate against the textile industry. Then manufacturing, electrical components and more.

It’s not just business, it’s also politics. The China factor will transcend government changes in both countries, but the narratives around it will be accentuated during these months in the heat of Joe Biden and Donald Trump’s presidential campaigns. Unfortunately for us, both agree to close spaces to China, in such a way that in their proselytizing speeches they will add a postscript to their partner from the South: “be careful not to become the back door through which products and Chinese services can come in.” Mexico will become the scapegoat for US interests.

Text via Expansión.