Mexico dismisses Trump’s proposed tariffs on imported autos

Mexico City, May 26 (IANS) Mexico’s Economy Minister Ildefonso Guajardo has dismissed as “bombast” the latest US proposal to impose tariffs on imports of foreign vehicles and auto parts.

Appearing on a television news show on Friday, the minister, who heads Mexico’s negotiating team in talks with the US and Canada to renegotiate the 1994 North American Free Trade Agreement (NAFTA), rejected the idea of introducing a new, higher tax on vehicles imported into the US, Xinhua reported.

“What one has to understand is that our strategy and negotiating process cannot change because of this bombast that they launched over there,” said Guajardo.

US President Donald Trump said on Wednesday that he has instructed Secretary of Commerce Wilbur Ross to consider initiating a national security investigation into automobile imports.

Ross has initiated a so-called Section 232 investigation into the national security implications of automobile imports, according to the US Commerce Department.

Guajardo ridiculed the idea, joking that “over there, on the comedy shows, they say that having a Mercedes in Manhattan is a national security risk.”

The US proposal was widely seen as an attempt to pressure Mexico into agreeing to other US demands, such as changes to the rules of origin for automobiles, but the tactic failed to sway Mexico.

“The more noise this bombast makes, the more we should concentrate and commit to a solid, well thought out strategy,” Guajardo added.

He estimated there is a 40 per cent chance NAFTA’s partners will be able to negotiate a new deal before Mexico holds presidential elections on July 1.

The trade deal has been under negotiation since August on the insistence of Trump, who believes the terms benefit Mexico and Canada at his country’s expense.

According to Mexico, NAFTA has benefited the North American automobile industry as a whole, today the world’s third-largest, after the European Union and China.

Each US-made automobile contains $3,800-worth of Mexican parts, while each Mexican-made vehicle contains $5,500-worth of US parts, Mexican government figures show.

The NAFTA region manufactures 18 million vehicles a year, with 12.5 million produced in the US.

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