Chinese-funded factories in Mexico are “very unlikely” to be excluded from preferential treatment under the United States-Mexico-Canada Agreement (USMCA) despite the free trade deal being up for review next year, a Mexican envoy said on Thursday.
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“There is no indication that there are going to be restrictions targeting Chinese companies,” David Trujillo, deputy commercial counsellor at the Mexican Embassy in China, told the Post on the sidelines of the China International Supply Chain Expo.
Tariffs imposed during US President Donald Trump’s first term prompted many Chinese companies to relocate, with Mexico becoming a popular destination for overseas investment. The USMCA allows imports from the country to enter the US market tax-free as long as a certain share of the goods is produced in North America.
But with US-China trade tensions escalating since Trump’s return to office, questions have arisen over whether Chinese firms in Mexico will retain these benefits – especially as Washington’s recent tariffs on steel and aluminium imports have already been seen as undermining the free trade agreement.
Beijing has also warned other countries against reaching trade deals with the US that come at China’s expense.
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However, Trujillo said revisions to the USMCA would likely focus on tightening rules-of-origin requirements – meaning companies would need to make more of their product locally to qualify – rather than introducing restrictions on specific countries.
“For key industries like the automotive industry, the requirement is now 75 per cent,” he added. “It might be higher.”