Victor Cadena, executive vice president from Mexican Chamber for Commerce in China

It is unnecessary for Mexico to follow the US on every policy, Victor Cadena, executive vice president from Mexican Chamber for Commerce in China, told the Global Times during an exclusive interview. Cadena said Mexico should not follow in the footsteps of the US by imposing tariffs on electric vehicles and other goods from China. Instead, it should provide a more stable legal framework and investment environment for Chinese companies investing and operating in the country.

The US announced last week that it has finalized sharp tariff hikes on certain Chinese products following a four-year review to "strengthen protections for strategic industries," despite opposition from various sectors.    

The tariff increase package under the Section 301 investigation on Chinese products included a 100 percent tariff on electric vehicles (EVs), a 50 percent tariff on photovoltaic cells, as well as a 25 percent tariff on EV batteries, ship-to-shore cranes, steel and aluminum products, beginning from September 27, according to a notice released by US Trade Representative's Office (USTR) on Friday.

As a member of the North American Free Trade Agreement, Mexico has become a new hotspot for Chinese companies looking to expand overseas, benefiting from tariff advantages when exporting to the US. 

In recent years, many Chinese electric vehicle manufacturers have flocked to Mexico, selling their products locally and planning to establish factories there. Whether Mexico will follow the US in imposing tariffs on Chinese electric vehicles and other products has become a point of concern for various parties.

Cadena told the Global Times that as of now, Mexico has not followed the US decision to impose tariffs on Chinese products. 

Mexico does not need to follow the US approach in everything, he stated, emphasizing that as a sovereign nation, Mexico has its own legislation and trade rules. 

Political and economic policies of Mexico's newly elected President Claudia Sheinbaum toward China are largely consistent with those of the current government, which are very stable. 

Furthermore, Cadena said the economic and trade relationship between China and Mexico has matured significantly, with agreements in place to avoid double taxation and protect investments, providing a stable legal framework for Chinese enterprises to invest and operate in Mexico.

Cadena said United States-Mexico-Canada Agreement (USMCA) has strict regulations regarding trade among its member countries and that it includes a dispute resolution mechanism. 

If one country raises tariffs, the other countries are not forced to accept it. If the US imposes punitive tariffs on electric vehicle products produced by Chinese companies in Mexico in the future, the dispute can be resolved through an arbitration committee. Over the past 30 years, Mexico has won many similar trade disputes with the US. "I hope these circumstances can provide more confidence to the Chinese government and enterprises," said the trade representative. 

CPA, a US organization cited Mexico's Secretariat of Economy as saying in 2023 that, investment from China to Mexico has increased to about $225 million annually, nearly quadrupling the average annual investment from the prior decade (2007 to 2016). 

Cadena said that in recent years, Chinese automotive companies such as Chang'an and BYD have planned to establish factories in Mexico. In addition to large automotive manufacturers, dozens of Chinese auto parts companies have also set up factories in Mexico over the past decade. 

He expressed his optimism about the prospects for Chinese companies going to Mexico, and believed this trend will continue in the coming years. Although there are uncertainties, Cadena said he has seen that the economic and trade exchanges between the two sides have not been hindered. 

Mexico should provide better business conditions for these companies in the future, allowing them to operate smoothly and grow steadily in compliance with regulations, he stated. This is a win-win situation. The Mexican business community's commitment to China is long term, said Cadena.