Mexico has announced it will take legal action against United States President Donald Trump’s decision to impose steep tariffs on washing machines and solar panels imported into the U.S.
In a prepared statement released yesterday, the Secretariat of Economy (SE) said that the government “regrets the United States’ decision not to exclude Mexico from the measures” and will “use all legal recourses so that the U.S. complies with its international obligations.”
The agency cited an article from the North American Free Trade Agreement (NAFTA) that provides for compensation in the event that economic safeguards are imposed by one member country on another.
Trump announced yesterday that a 20% tariff will apply to the first 1.2 million large washing machines imported during the first year of the new protectionist scheme. Imports beyond that number will be subjected to a 50% tariff.
The tariffs will decline to 16% and 40% respectively in the third year after their introduction.
Solar panels will initially face a 30% tax before dropping to 15% by the fourth year. However, the scheme will allow 2.5 gigawatts of unassembled solar panels to be imported tariff-free.
Trump said that the tariffs will help U.S. manufacturers and positioned the decision as part of his promise to put American companies and jobs first.
The chairman of Whirlpool Corporation, Jeff Fettig, subsequently said that the new tariff on washing machines would create new manufacturing jobs in the U.S. states of Ohio, Kentucky, South Carolina and Tennessee.
But the SE statement questioned the impact of Mexican imports on the competitiveness of U.S. industries.
It pointed to a conclusion reached by the United States International Trade Commission that washing machines exports from Mexico don’t harm the U.S. industry.
It also said that the U.S. washing machine manufacturing industry itself had stated that damage it had suffered due to imports was not related to Mexican-made products.
The SE statement added that the United States’ importation of Mexican solar panels encourages the development of renewable energies, which in turn contribute to a reduction of the use of fossil fuels.
The U.S.-based Solar Energy Industries Association said the new tariff would lead to the delay or cancelation of billions of dollars of investment in the sector and result in 23,000 job losses.
According to data from the United States census bureau, the U.S. imported washing machines worth US $278 million from Mexico in 2016 and solar panels valued at just over US $1.1 billion.
Trump’s announcement of the new tariffs came as Mexico, the United States and Canada are meeting in Montreal, Canada, this week for the penultimate round of NAFTA renegotiation talks.