S presidential candidate Donald Trump believes that Mexico is allowing Chinese investment into the automotive sector in such a way that it threatens the jobs of its counterparts in his country. In an interview with the magazine, BusinessWeek published on Tuesday, July 16 the former Republican president makes it clear that his anti-Mexico rhetoric is not just for rallies and mass events, but also with the business elite.
In response to a question about possible policies he would implement to encourage companies to build factories that create jobs in the U.S., Trump said: “I want them to build here. That’s the other thing that tariffs do. If you put tariffs on companies, they will build here, because they don’t want to pay the tariff.”
“Bad things are happening,” he continued, according to the transcript of the interview, “something really bad is happening over there in Mexico. China is building huge car plants. They are going to put the UAW out of work. They are building them in Mexico to make cars to sell in the United States. What do we gain from this?”
The world’s largest electric vehicle manufacturer, China’s BYD, has said it is in talks with several states in Mexico to find a suitable location for its new factory. BYD hopes its investment will create 10,000 jobs. This has angered US lawmakers and politicians, who have complained that China is using Mexico as a kind of back door to the US market. However, there is only one Chinese-brand car factory in Mexico, and it is small and Mexican-owned.
On the other hand, the US recently went after the raw materials from which cars are made: steel and aluminum. On July 10, the White House announced that tariffs of 25% and 10%, respectively, would be levied on metal from Mexico if the country does not prove that it is of 100% Mexican origin. This, again, is a barrier to possible “triangular” trade with China.
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