The Ministry of Commerce Photo: VCG

China is paying close attention to Mexico's hiking of tariff rates for goods placed under its 392 tax codes, and believes such moves will push up the overall tariff level for the country and dent investor confidence in Mexico, a spokesperson from Ministry of Commerce (MOFCOM) said on Thursday. 

From August 16, Mexico raised import duties between 5-25 percent for goods under its 392 tax codes from the countries that have not signed free trade agreements (FTA) with Mexico.

"Despite the fact that the measures taken by the Mexican authorities were not targeted against specific countries, they will, to a certain extent, affect trade and economic exchange between China and Mexico," He Yadong, the spokesperson, told a press conference on Thursday.

Mexico is China's second largest trading partner in Latin America, while China is Mexico's largest trading partner globally. Bilateral trade and investment has been growing rapidly in recent years, bringing many benefits to the two peoples, He said.

Historical experience has shown that raising tariff duties will increase production costs of downstream industries and hurt consumer interests, He said. "It is hoped that Mexico, as a beneficiary of free trade, will adhere to the principles of free trade and use such measures with caution."

China is willing to work with Mexico to leverage the complementary advantages of the two economies, promote bilateral trade and investment growth, and promote the healthy and stable development of bilateral economic and trade relations, He said.

Mexico's hiking of import duties comes as China-Mexico trade and investment ties have continued to accelerate, and some analysts believe that countries including Brazil, China, and South Korea stand to lose from Mexico's latest trade action. Countries that have FTA deals with Mexico, including the US, were not affected.

Mexico benefited from the current global relocation of production capacity by global companies and many Chinese companies that have moved to Mexico need to source upstream materials and equipment from China.

In 2022, China-Mexico trade totaled $94.97 billion, increasing 9.8 percent year-on-year, which followed an annual surge of 41.9 percent in bilateral trade in 2021.