Presidential candidate Ricardo Anaya yesterday described the United States’ launch of an investigation into vehicle imports that could lead to new tariffs as an act of “complete obscenity and hostility.”
Speaking at a political forum, the candidate for the right-left For Mexico in Front coalition made the statement within the context of ongoing NAFTA negotiations, charging that United States President Donald Trump’s decision to undertake the probe is another example of the U.S. government’s lack of respect for its Mexican counterpart.
Anaya also warned against rushing into signing an updated trade pact if it is not favorable to Mexico and if negotiations continue in a climate characterized by disrespect.
“I’m absolutely convinced that in the face of the insults, in the face of these shows of bravado, the worst thing that Mexico could do would be to become intimidated and sign an agreement under unfavorable conditions,” he said.
“We have to hold on and understand that beyond the agreement there are WTO [World Trade Organization] rules that set reasonable tariffs so that Mexico can continue exporting to the United States,” continued the candidate, who holds second place in opinion polls.
The United States Department of Commerce issued a statement yesterday announcing that “following a conversation with President Donald J. Trump, U.S. Secretary of Commerce Wilbur Ross initiated an investigation under Section 232 of the Trade Expansion Act of 1962.”
The aim of the probe, it said, is to determine whether imports of automobiles to the United States are damaging the economy and pose a threat to the country’s national security.
The statement also cited a letter Ross sent to U.S. Secretary of Defense James Mattis to inform him about the investigation.
“There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry,” the secretary wrote.
“The Department of Commerce will conduct a thorough, fair and transparent investigation into whether such imports are weakening our internal economy and may impair the national security.”
News of the probe was met with criticism from industry groups that represent both manufacturers and auto dealers, which said that any new tariffs would hurt consumers because cars would be more expensive and supply would be reduced.
Prior to the Department of Commerce announcement, Trump said that both Mexico and Canada have been “very difficult to deal with” in NAFTA negotiations.
“They have been very spoiled. What they asked for is not fair,” he told reporters.
“. . . But I will tell you that in the end we win. Our auto workers are going to be extremely happy,” he said.
A White House official said that the move to initiate the probe was partly aimed at pressuring Mexico and Canada to make concessions in order to reach a NAFTA deal.
Rules of origin for auto contents and auto-sector wages have been contentious issues between the three countries, with the United States pushing for higher regional content in order for a car to be given tariff-free status and higher hourly rates for employees in Mexican plants.
If the United States goes ahead with imposing tariffs of up to 25% on vehicle imports, the news agency Reuters said, they could be particularly harmful to Asian auto makers, many of which have plants in Mexico.
Bloomberg said that because Mexico is by far the largest source of U.S. auto imports, it would be most affected by any new protectionist measures.
European makers such as Volkswagen, which also has plants in Mexico, are also at risk if any new tariffs are implemented.
If tariffs are applied to Mexican-made vehicles and other local products, Anaya said, Mexico could retaliate by imposing reciprocal tariffs of its own.
“If they are imposed strategically on certain products, the same United States business people who support the Republicans in certain districts in particular are going to start to demand a change of attitude from the United States [government],” he said.