Mexico Plans to Establish Special Working Group to Reduce Chinese Auto Parts Imports
Mexico’s Economy Minister Marcelo Ebrard has informed representatives from the U.S. automotive industry about Mexico’s plans to create a special working group for auto suppliers, aiming to reduce imports of Chinese auto parts.
During his visit to Detroit on Friday, January 17th, Ebrard met with representatives from the U.S. automotive industry to strengthen bilateral cooperation. He emphasized the importance of the automotive industry as a key sector in the North American economy, accounting for 22% of the total trade under the United States-Mexico-Canada Agreement (USMCA).
According to a statement from the Mexican Ministry of Economy, Ebrard’s purpose of the trip was to “enhance cooperation between Mexico and the U.S. automotive industry.”
In a speech recorded by Bloomberg, Ebrard cautiously stated that he would not “speculate” on what may happen after the inauguration of U.S. President Trump on Monday. However, he mentioned that the Mexican government hopes to establish a special working group involving “major companies” to assess how to respond to Trump’s next moves.
Ebrard told company representatives, “Our main goal is to reduce imports from China, and for that, we need to closely cooperate.”
“Replacing such crucial parts is not an easy task, but it can be done. Even if not entirely, we can substitute a portion, enough to reduce the growth of Chinese imports,” he said.
Politicians in the U.S. and Canada are concerned that Chinese companies may use the USMCA to assemble cars in Mexico and then export them northward to evade tariffs. Consequently, many high-ranking officials in Washington, including U.S. Secretary of State nominee Marco Rubio, believe legislation should be enacted to curb such practices.
Over the past few weeks, Mexico has been taking various measures to combat cheap imports from China. This action is not only to strengthen the local industry but also to send a clear signal of alliance to the incoming U.S. government.
On Monday, the Mexican government announced a plan to replace goods imported from China with those manufactured in North America, consolidating trade partnerships with the U.S. and Canada.
Mexican President Claudia Sheinbaum stated at the time that Mexico would provide incentives for nearshoring, including tax exemptions, and develop specific plans for individual industries to increase the domestic content of Mexican products.
Mexican Finance Minister Rogelio Ramirez de la O pointed out that “if North America could replace 10% of imported goods from China and produce them in the region, Mexico’s GDP would increase by 1.2%, the U.S. by 0.8%, and Canada by 0.2%.”
Sheinbaum mentioned that the USMCA is the best way to compete with the Chinese Communist Party.
On Friday, Ebrard stated at a meeting organized by a business chamber in the Detroit area, “Large U.S. automakers need Mexico to compete with other groups.”