ROB SCHMITZ, HOST:
Earlier this week, Mexican lawmakers approved a 50% tariff on Chinese imports, including everything from shoes, microwaves to electric vehicles. The measure is set to take effect next year. China is the second-largest exporter to Mexico, just after the United States. Analysts say the move signals Mexico's interest in appeasing the U.S. at a moment when both countries are set to renegotiate their free trade agreement. President Claudia Sheinbaum denies this, saying it's intended to boost domestic manufacturing. Antonio Ortiz-Mena is a professor at Georgetown University and a fellow at the Atlantic Council's Adrienne Arsht Latin America Center. He joins us now from Mexico City. Welcome, Antonio.
ANTONIO ORTIZ-MENA: Glad to speak with you, Rob.
SCHMITZ: I'm glad to have you. So, Antonio, why is Mexico imposing such a steep tariff on Chinese products?
ORTIZ-MENA: I would say that there are two reasons, Rob. On the domestic front, Mexico is a strong competitor with China. We used to produce a lot of goods among the ones you mentioned - you know, furniture, textiles, you know, home appliances, even toys that are now being imported from China. So the first reason has to do with the government's attempt to revive industries that have been in a very difficult situation for a long time. That's number one. Number two, we have the USMCA review coming up in January - from January through June next year. And there is concern in North America about unfair trade practices from China. And one key industry is the auto industry, and auto parts were included in the tariffs. So I see both domestic reasons and international trade and relations with the U.S. behind the current Mexican tariffs.
SCHMITZ: Now, I'm curious. How much do you think the Trump administration is putting pressure on Mexico to make this type of decision?
ORTIZ-MENA: I'm sure they're putting pressure. But in a way, I think that's what Mexico wants to do unilaterally. So I think it's a situation where what Mexico wishes to do is, to a certain degree, align with what the U.S. expects from Mexico. So it's actually a bit of both but pointing in the same direction.
SCHMITZ: So how will this change Mexico's relationship with China?
ORTIZ-MENA: Well, it's been a complicated relationship. I would say that Mexico's relations with China are different from the relations of countries in South America with China. Those countries export a lot of agricultural commodities and minerals and not a lot of manufactured goods. So there's more complementarity between them and China. Whereas Mexico exports a lot of similar goods that China produces. So there's more direct competition. We're in a different situation from the rest of Latin America.
SCHMITZ: So, Antonio, what do you think this will mean for U.S. companies hoping to do more business in Mexico?
ORTIZ-MENA: I would say, in a way, this opens the opportunity to invest even more in North America, including Mexico, because a lot of intermediate goods that were being imported from China will now be produced in the U.S., Mexico or Canada. It's putting a certain wall against Chinese exports, and we will have to produce goods that we had been importing.
SCHMITZ: So we've seen with President Trump that U.S. tariffs on many different countries' products can kind of come and go very quickly. How durable do you think Mexico's tariffs on Chinese products will be?
ORTIZ-MENA: Well, I think they could be more durable because they're a different type, Rob. The tariffs imposed by the U.S. were done by executive action, and the executive can put those tariffs, and they can remove those tariffs, mostly on the International Economic Emergency Powers Act, IEEPA. Congress was not involved. In the case of Mexican tariffs, Congress was involved, so they are much stickier. You know, to remove them, we would also need additional congressional action. So they're of a different type, of a different kind. And I think the Mexican tariffs are stickier - if I can use that expression - than the IEEPA tariffs imposed by the U.S. government.
SCHMITZ: That's Antonio Ortiz-Mena, professor at Georgetown University and a fellow at the Atlantic Council's Adrienne Arsht Latin America Center. Antonio, thank you.
ORTIZ-MENA: Thank you, Rob. Transcript provided by NPR, Copyright NPR.
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