By Evaristo Lara
Marcelo Ebrard, Secretary of Economy of Mexico, confirms that the tariffs imposed by President Donald Trump will remain and perhaps the only certain thing to negotiate will be the rules of origin.
Completely eliminating tariffs is no longer a viable goal for the Mexican government and, during the second round of talks linked to the review of the Treaty between Mexico, the United States and Canada (T-MEC), the objective now is to reduce them to the minimum possible, since the approach is accepted that world trade has changed and is no longer governed by the traditional free trade model.
As anticipated by Jamieson Greer, United States trade representative, the permanence of tariffs for Mexico under section 232 is a practically accomplished fact, against which Ebrard simply recognized that the commercial scheme, based on complete opening, will hardly return.
“We should not be nostalgic for a time when there were no tariffs. The new system will include tariffs and rules of origin, which are sometimes more important,” said the Mexican official.
Faced with the new commercial scenario, sectors such as the automotive industry, as well as the industry linked to steel and aluminum, will be priorities in the negotiations proposed by Mexico to its northern neighbor.
Even the Secretary of Economy stated that in the automotive industry a reduction has already been achieved with respect to the 25% tariff proposed months ago by the United States and that is charged to most countries.
“Mexico has already explained its position to the United States: The very glorious scenario is to operate with the lowest possible amount of tariffs and maintain as open a trade as possible,” he stressed.
The point of controversy is, although the formal negotiations on the T-MEC do not start until the last week of May, for companies that operate in Mexico the position assumed by their government of accepting the new rules of the game imposed from Washington will represent billions of dollars to cover if they are still interested in accessing the US market.
“It is not going to be easy, it will be difficult, complex. There is a lot of uncertainty, but we are going to make a great effort,” Ebrard said about the negotiations to be carried out on the T-MEC.
For Mexico, tariffs under section 32 of the US Trade Act imply tariffs of 50% on steel and aluminum, and 25% on automobiles.
Keep reading:
• The US and Mexico announce the start of the formal negotiation of the T-MEC on May 25
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• “Trump’s harsh tariff tactics are working”
