Donald Trump’s tariff plans turn Chinese investment in Mexico into a waiting game
US president-elect on Monday said his new administration would immediately impose a 25 per cent tariff on imports from Mexico.
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China’s BYD pauses Mexico factory plans until after US election
Mexico could be a key production site for BYD, along with plants it is building or already operating in Brazil, Hungary, Turkey and Thailand.
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Sheinbaum, on the BYD plant in Mexico: “There is no Chinese automotive investment project”
The Mexican president assured that
she will give priority to investments from countries with which she has a trade agreement, such as
the United States
The president has emphasized that Mexico is not closed to the arrival of Chinese investment in the country,
but indicated that priority will be given to trade with countries with which it has a trade agreement, such as the United States and Canada. “We have to see which project and under what circumstances,” said Sheinbaum regarding Chinese investment. Sheinbaum's refusal on the subject, a few hours after her call with President-elect Donald Trump, once again puts the plans of the electric car giant BYD in uncertain territory.
The company has not yet commented on Sheinbaum's statements, however, in its latest launch in Mexico City, just before the US presidential elections, the company's executives confirmed their plans to build an electric vehicle plant to supply the domestic market, and even Latin America. At that time, Ray Zou, president of BYD Mexico, detailed that the plant would generate between 5,000 and 10,000 jobs and would be ready in one or two years. He also insisted that this manufacturing center does not plan to supply the US market, as Republican Trump has suggested in the past.
The interest of Chinese companies in Mexico has been on the rise in the last decade. During the first half of this year, foreign direct investment from this country on American soil exceeded 235 million dollars, a figure higher than the 11 million dollars in investment registered in all of 2010, according to figures from the Ministry of Economy. The arrival of Chinese electric cars imported into the country has fostered demand for Chinese auto parts, semiconductors and components.
The recent threat by the US president-elect to raise tariffs on imports from Mexico is in line with other statements he made during his campaign about an alleged triangulation of Asian trade, via its southern neighbor. The Mexican government has insistently denied this crossing of goods and has responded to threats of a higher tariff barrier with the same currency, assuring that “one tariff will come next.”
The bilateral tension has raised alarm bells about the economic future of the Latin American country. The market was quick to react and the exchange rate of the peso against the dollar weakened, once again, to levels above 20.80 units per dollar this week, while the rating agencies and financial centers adjusted, downwards, the expectations of economic growth in Mexico. This episode has been settled, for the moment, with a call between Sheinbaum and Trump in which they talked about the control of the northern border in matters of migration and drug trafficking. The issue of tariffs was not on the table, for now.
La presidenta mexicana aseguró que dará prioridad a las inversiones de países con los que tiene un tratado comercial como Estados Unidos
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Chinese vehicle brands were the “worst” rated among Mexican consumers and with the highest number of problems reported in the operation of the unit. Among the most common failures are: the infotainment system, the powertrain and driving assistance, revealed a study by JD Power as of August 2024. According to the Automotive Design and Performance 2024 (APEAL) study, section of the Vehicle Quality and Reliability Study (VDS) conducted by JD Power Mexico 2024, Chinese and French car brands are the ones that report the highest number of problems for consumers, with 271 and 254 failures per 100 units, respectively, compared to 176 for Italians and 201 for Japan.
Based on a survey of 7,169 consumers of 26 brands and 134 models between 1 and 3 years old, conducted from November 2023 to August 2024
, the company ranked the Chinese brand MG as the worst rated with 807 points in design and performance satisfaction. In contrast, Toyota is ranked highest rated with 907 points.
Una encuesta de consumo arrojó que la marca china MG es la de menor puntaje en satisfacción de diseño y desempeño; en contraste, Toyota es la mejor
www.eleconomista.com.mx
Consumer complaints against Chinese-made cars are increasing in Mexico
At the moment, the largest number of reports to Profeco is against Chirey and MG; they highlight breach of warranty and deficiencies in repair and refusal to terminate the contract
Chinese automakers are already beginning to face complaints from their clients before the Federal Consumer Protection Agency (Profeco) as part of their entry and growth in the Mexican market.
From 2021 and so far this year, Chirey and MG have a combined total of 181 complaints, according to the Profeco Commercial Bureau.
Of that total, Chirey is responsible for 98 complaints between 2022 and 2024; SAIC, the marketer of the MG brand, is involved in 83 complaints between 2021 and 2024.
Profeco indicates that the main reasons for complaints at the national level are the refusal to enforce the guarantee, manufacturing defects, deficiencies in repair, refusal to terminate the contract and refusal to deliver the product or service.
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