Chinese manufacturers in Mexico tread on thin ice amid threat of more US barriers

Washington fears that Chinese cars may be able to come over the southern border with zero tariffs under the United States-Mexico-Canada Agreement

While some believe strict compliance to ‘rule of origin’ regulations can save them, others fear more restrictions may be on the way

Reading Time:7 minutes

Ji Siqiin Monterrey, Mexico

Published: 12:00am, 6 Apr 2024Updated: 3:58am, 6 Apr 2024

Mexico, often perceived in China as a remote and dangerous place, has also become a gold rush destination for Chinese companies looking to serve both the local market and the US. As they learn to adapt to a new environment, Washington policymakers are wary. The once and possibly future US president, Donald Trump, is threatening to slap tariffs on products coming from Mexico, including electric vehicles, to block China. In the second of a three-part series, the South China Morning Post looks at how Chinese companies are trying to avoid becoming lightning rods for America’s election year rhetoric.

“Keep a low profile.” Such was the advice often repeated by Chinese embassy officials in Mexico to Chinese-funded factories in the country in recent weeks.

The factories, however, do not need to be reminded. Warnings from the other side of Mexico’s northern border are more evident than ever, with the latest threat coming from former US president Donald Trump, the presumptive Republican nominee in this year’s election.

“China now is building a couple of massive plants where they’re going to build the cars in Mexico and they think that they’re going to sell those cars into the United States with no tax at the border,” Trump said at a campaign rally in Ohio in mid-March. “We are going to put a 100 per cent tariff on every car that comes across the lot.”

In Monterrey, an industrial city 140 miles (225km) south of the border, many Chinese firms increasingly feel like they are treading on thin ice: some ventured to Mexico because of worsening Sino-US economic relations, so the last thing they want is to be on a US watch list.

But this may be only wishful thinking amid the soaring political discourse that saturates all channels in the US election season.

The industrial city of Monterrey, Mexico, is 140 miles (225km) south of the US border. Photo: Siqi Ji

SCMP Series

China’s businesses in Mexico

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Chinese manufacturers in Mexico tread on thin ice amid threat of more US barriers

Washington fears that Chinese cars may be able to come over the southern border with zero tariffs under the United States-Mexico-Canada Agreement While some believe strict compliance to ‘rule of origin’ regulations can save them, others fear more restrictions may be on the way

Washington fears that Chinese cars may be able to come over the southern border with zero tariffs under the United States-Mexico-Canada Agreement

While some believe strict compliance to ‘rule of origin’ regulations can save them, others fear more restrictions may be on the way