Mexican auto parts industry unshaken by Tesla gigafactory news

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July 25, 2024

An Audi car body on a production line in a factory in Mexico — Car bodies at an Audi factory in San José Chiapa, Puebla. (Carlos Aranda/Unsplash)

The Mexican automotive industry is taking in stride the news that investment in Tesla’s planned factory in northern Mexico has been paused until after the U.S. presidential election.

During an earnings call on Tuesday, Tesla CEO Elon Musk said the electric vehicle manufacturer had “paused” its project in the state of Nuevo León. Construction of the gigafactory and investments from suppliers would have brought in more than US $15 billion, according to Governor Samuel García.

The National Auto Parts Industry (INA) and the Mexican Auto Dealers Association (AMDA) played down any idea of a crisis, asserting that the Mexican automotive sector is strong. Mexico is the world’s No. 4 auto parts producer and the No. 1 supplier of auto parts to the United States.

“The North American industry supply chain is not based on the eventuality of certain things happening,” INA said in a press release. “Mexico is just as fundamental for U.S. competitiveness as is the United States for us.”

INA reiterated its forecast for historic production levels this year, projecting annual production to exceed US $126 billion. U.S. government data shows that the value of exports of Mexican-made auto parts to the United States increased 9.4% annually in the first four months of 2024, reaching a record high of US $28.37 billion.

Regarding the electric vehicle sector, Mexico boasts more than 100 suppliers which export parts to companies including Tesla in California, Lucid Motors in Arizona and Rivian in Illinois.

Construction begins on infrastructure for Tesla factory in Nuevo León, Mexico. — CEO Elon Musk said Tesla would pause development of its Nuevo León factory, pictured, until after the U.S. election in November. (Samuel García/X)

AMDA president Guillermo Rosales was equally nonplussed, saying Mexico has no reason for alarm over the “pause” in the planned Tesla factory.

“This has more to do with the global electric vehicles market falling below projections made three years ago,” Rosales said. “In addition, with all the competition beginning to emerge from traditional auto manufactures and start-ups as well as Chinese firms, Tesla is seeing its market shrink.”

Rosales noted that there had been no investment beyond surveying and property acquisition on the part of Tesla and a few infrastructure projects completed by the state of Nuevo León.

“How can this be a setback if it didn’t even exist yet?” he said.

Metalsa auto parts manufacturing factory — Mexican auto parts industry leaders expressed that the pause on development of Tesla’s Nuevo León factory was a non-issue, given the importance of the Mexican auto parts industry. (Metalsa Mexico)

INA president Francisco González seconded Rosales’ observation. “The Tesla plant still is just that, a project,” adding that “companies based in North America — and in many other parts of the world — know Mexico is an auto parts supplier. And we continue to supply the domestic sector, too.”

President Andrés Manuel López Obrador dismissed Tesla’s decision as little more than politics and speculation. “This is not serious,” he said Wednesday, citing the U.S. presidential campaign and speculation that former U.S. President Donald Trump would impose tariffs on auto imports from Mexico if he wins in November.

López Obrador said such a move would be impractical since building automobiles entirely in the United States would result in vehicles that are too expensive for U.S. consumers.

“Let’s remember that [Trump] made these statements while campaigning, which usually means it’s just rhetoric,” he said. “But I’m sure Mr. Musk is very familiar with campaign speeches.”

“[Tesla] probably has another business plan,” he added. “Oftentimes these companies play the market. They make a public statement to boost their share price and then move forward with production plans.”

With reports from Fortuna, Forbes México, El Universal and Sin Embargo

Over 500 Chiapas residents flee cartel violence into Guatemala

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MND Staff

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July 25, 2024

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A long line of Mexican men women and children from Chiapas marching on a highway, holding makeshift cloth signs saying they were forced by violence to flee into Guatemala — Residents of communities in the Chiapas municipalities of Frontera Comalapa and Motozintla de Mendoza who walked from their towns to the Guatemalan border state of Huehuetenango, according to the Guatemalan news agency Prensa Comunitaria Kilometro 169. (Prensa Comunitaria/Facebook)

Hundreds of Mexican families fleeing cartel violence in Mexico’s southern state of Chiapas have sought refuge across the border in Guatemala, Guatemalan President Bernardo Arévalo confirmed Wednesday.

Reports indicate that more than 500 men, women, children and elderly people crossed into Guatemala from Chiapas, settling in communities within the border state of Huehuetenango.

#Chiapas: Así se cruzan convoy de camionetas esta noche en la región de la Sierra y la Frontera. Reportan enfrentamientos en AMATENANGO DE LA FRONTERA. Familias enteras han quedado atrapados en el fuego cruzado. Esta noche es la pesadilla más larga en mucho tiempo que viven… pic.twitter.com/9EzmwS2Zja

— Isaín Mandujano (@isain) July 25, 2024

Footage posted by Mexican journalist Isaín Mandujano, reportedly showing a convoy of trucks manned by criminal groups in the Chiapas border region of Sierra Mariscal, just west of Guatemala, on Wednesday night. According to Mudujano, there had also been reports of drone attacks on the area. (Isaín Muandujano/X)

Major Ann Marie Argueta of Guatemala’s Ministry of National Defense said that approximately 180 displaced individuals are being sheltered in a community within the Guatemalan municipality of Cuilco.

Mexican refugees have arrived in at least two other communities, according to media reports. Their number totals approximately 580 people, according to Guatemala’s Executive Secretariat of the National Coordinator for Disaster Reduction (CONRED).

The agency and other institutions have been providing shelter, food, medicine and other care. At least one school was being used as a shelter.

The exodus comes as violent clashes between the Sinaloa Cartel and the Jalisco New Generation Cartel (CJNG) continue unabated in Chiapas’ southern, mountainous areas. Locals say the latest round of violence between the two largest criminal gangs in Mexico, and their local offshoots, dates back approximately three years.

According to the digital media outlet Chiapas Paralelo, a criminal group arrived Tuesday in the Chiapas town of San José de los Pozos — located in the municipality of Amatenango de la Frontera. The group evicted all the town’s inhabitants.

They “had to flee with the little they had on them,” Chiapas Paralelo noted. “They left behind their looted houses, their backyard animals, their crops, and many of them could not even [take] their vehicles.”

Map of the Sierra Mariscal region of Chiapas, showing its municipalities. — The Sierra Mariscal region. (Chiapas Finance Ministry)

According to CONRED, the refugees then began the long walk to Cuilco, situated just over 30 kilometers from the Chiapas border. Some ended up in two other Cuilco villages — Perla Escondida and El Oaxaqueño.

Guatemala’s Human Rights Ombudsman’s office and its Army estimated the number of displaced Mexicans at around 300, but CONRED put the number at around 580.

“Unfortunately, we are presenting a risk situation for the Guatemalan population,” Huehuetenango Governor Elsa Hernández said. She called on Guatemala’s citizens, NGOs and other institutions to provide humanitarian support, adding, according to Chiapas Parelelo.

“Unfortunately, the Mexican authorities have not taken any action to protect their citizens,” Hernández added.

Mexican authorities had yet to officially comment on the displacement as of Thursday, leaving the exact number of refugees uncertain. However, the Mexican newspaper La Jornada reported Thursday that Chiapas state security ministry officials had told its reporters that they had received no reports of displaced individuals in that area.

President Arévalo, speaking on Wednesday at the opening of a hospital in another part of the country, emphasized the dire circumstances and violence driving the Mexican citizens’ displacements. Guatemala, he added, is mobilizing resources to provide assistance through its Ministry of Defense and through local authorities, as well as deploying its military to provide augmented security in the zone.

The situation in Chiapas has deteriorated significantly due to cartel disputes over drug trafficking routes, a situation that has exacerbated poverty and violence in Indigenous communities.

Underscoring the precarious conditions faced by the fleeing Mexican families, a 91-year-old diabetic woman died en route to Guatemala due to lack of medication, her fellow travelers told La Jornada. Luckier was the situation of a boy who had been recovering from a recent surgery in his Chiapas community: La Jornada reported that he was receiving postoperative care in Guatemala.

The exodus, while dramatic in its suddenness and in the number of refugees, marks a continuation of migration trends from southern Mexico into Guatemala since early 2024.

Recent incidents, including a public display of bodies in Chiapas, have highlighted the brutal tactics employed by the criminal organizations involved.

With reports from La Jornada, Infobae, Chiapas Paralelo and El Universal

Sheinbaum refutes Trump on cartels; casts doubt on Tesla’s real reasons for factory pause

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MND Staff

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July 25, 2024

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Claudia Sheinbaum speaks at a press conference — Claudia Sheinbaum spoke to reporters about recent remarks by Donald Trump and Elon Musk. (Mario Jasso/Cuartoscuro)

President-elect Claudia Sheinbaum has rejected Donald Trump’s claim that Mexico is “petrified” of drug cartels.

At a press conference on Wednesday, Sheinbaum also said that it is “very unlikely” that the former United States president will impose tariffs on cars or other products made in Mexico if he returns to the White House next January.

Donald Trump in an interview — Trump said that U.S. military strikes against Mexican cartels are “absolutely” a possibility if he is elected. (Screen capture)

Trump said in an interview with Fox News that “Mexico is petrified of the cartels because they’ll take out a president in two minutes.” He also said that U.S. military strikes against Mexican cartels were “absolutely” still on the table.

Asked about the former remark, Sheinbaum said she didn’t agree with it.

“Mexico has made progress in reducing insecurity and we’re going to make more progress,” she said.

Sheinbaum said that under her leadership Mexico would continue to engage in high-level security dialogue with the United States, and that the two countries would “work together” on security issues such as drug and arms trafficking wherever they can.

“We’re going to do it, always defending [Mexico’s] sovereignty,” she said.

Sheinbaum dismisses Trump’s tariff threats

Trump said in March that he would impose a 100% tariff on cars manufactured in Mexico by Chinese companies, and asserted last week that the duty could go as high as 200%.

As things stand, Chinese companies make very few cars in Mexico, but large automakers such as BYD and Chery have plans to open plants here. Trump has also proposed imposing a 10% tariff on all products imported into the United States.

Sheinbaum, who will be sworn in as Mexico’s first female president on Oct. 1, said she considered U.S. tariffs on products made in Mexico “very unlikely.”

AMLO reads his letter to Donald Trump at a press conference — AMLO read out loud his letter to Donald Trump at his Wednesday morning press conference. (Lopezobrador.org.mx)

She noted that President Andrés Manuel López Obrador, in a letter he sent to Trump this week, pointed out that if tariffs were imposed on vehicles and auto parts made in Mexico, consumers in the United States would face higher prices when buying a car “because the cost of production in Mexico is lower than the cost of production in the United States for a variety of reasons.”

What Trump says on the campaign trail is one thing and what he will actually do if re-elected is another, Sheinbaum said.

The president-elect said that both the Republican Party candidate and Kamala Harris, who appears almost certain to be the Democratic Party’s nominee, both know the importance of the USMCA free trade pact to North America as a region.

Claudia Sheinbaum with U.S. and Mexican officials — Sheinbaum, seen here with U.S. Ambassador Ken Salazar (far right) and security advisor Elizabeth Sherwood-Randall in June, says she is confident of the trade relationship with the U.S., regardless of the outcome of the presidential election. (Claudia Sheinbaum/X)

She said said she is “convinced” that whoever wins the presidential election in the United States, “the trade relationship between Mexico, the U.S. and Canada will continue because it benefits North America.”

“It benefits the three nations, it benefits the people of the three countries,” she said.

Sheinbaum to review Tesla’s decision to ‘pause’ Mexico plant

Sheinabaum also responded to Tesla CEO Elon Musk’s statement on Tuesday that the electric vehicle manufacturer’s planned “gigafactory” project in Nuevo León is currently “paused” because of the possibility that Trump will impose tariffs on vehicles made in Mexico if he wins the Nov. 5 presidential election.

Tesla gigafactory rendering for Nuevo Leon, Mexico — Rendering of the planned Tesla gigafactory in Nuevo León, which the state’s governor has said would bring in over US $15 billion investment. (Tesla)

“We have to look at the issue of Tesla in Mexico. In reality, since the [gigafactory] announcement was made [in March 2023] until now there hasn’t been much progress,” she said.

“We have to look at whether the reason really is the [U.S.] election and what Trump said,” Sheinbaum said. “There could be other reasons,” she added.

López Obrador claimed Wednesday that Tesla “must have another business plan” if it is not planning to go ahead with the gigafactory project in Nuevo León.

“These companies often don’t produce but rather speculate; they make an announcement and do very well on the stock exchanges, the price of their shares goes up and production takes a back seat,” he said.

With reports from Expansión Política, Milenio and Bloomberg Línea

Mexico City’s best parks that aren’t Chapultepec

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Bethany Platanella

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July 25, 2024

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Desierto de los leones park — Mexico City's parks are so much more than just Chapultepec. Find your new favorite urban escape on our list. (Gobierno de México)

Chapultepec Park has it all. At nearly double the size of New York’s Central Park, Chapultepec is home to nine museums, a zoo, a castle and a vibrant history dating far past Moctezuma and the Mexica. But what are Mexico City’s best parks that aren’t Chapultepec?

It’s also a major attraction to an average of 40,000 visitors a day. And sometimes you just don’t want to be around all those people. The good news is that in a city as big as Mexico City, there are alternatives that cater to everyone: meditators, hikers and Zumba experts alike. Enjoy this list of seven fantastic parks in Mexico City that aren’t Chapultepec.

Parque México

The leafy oasis in the center of La Condesa was constructed in 1927. Its oval shape is meant to evoke memories of the former horse race track it was built on. What the park currently lacks in horses is well made up for with a sizable population of neighborly dogs, nearly-domesticated squirrels and graceful swans floating around their manmade pond.

Size: 9 hectares

Hours open: 24 hours

Activities: Walk, run, bike, exercise at the outdoor gym, play at the playground, take a Zumba class, soak up some sun, learn how to properly wield a lightsaber.

Something unique: There is a designated zen zone for meditation and reading, with speakers playing soft music and hammock-style chairs.

Parque La Mexicana

Santa Fe’s answer to Chapultepec Park is studded by high rise apartment complexes that reflect off the lakes that serve much greater a purpose than aesthetics – they trap contaminants and dust particles as well as control temperature and humidity levels.

Size: 20 hectares, 8 currently under construction

Hours: 5:00 AM – 9:00 PM

Activities: Walking and biking paths, fountains, a skate park, sports fields, padel courts

Something unique: In addition to 17 dining establishments, there is an actual Costco onsite so you can stock up on paper towel rolls after a game of padel.

Parque Hundido

Parque Hundido translates to “sunken park” for a reason. The land it occupies in the Extremadura Insurgentes neighborhood of Benito Juárez was once rich in clay deposits which were extracted for a nearby brick factory, eventually forming a sinkhole. When Avenida Insurgentes was paved and the population swelled around the 1930s, the eyesore was transformed into a park for new, wealthy residents. It’s recognizable today for its giant working clock made of flowers.

Size: 100 square meters

Hours: 24 hours

Activities: Walking paths, an outdoor gym, children’s playground, an audiorama for outdoor concerts and movies

Something unique: There are 51 statue replicas carefully placed along pathways dedicated to Indigenous civilizations such as the Maya, Huastec, Zapotec and Olmec.

Viveros de Coyoacán

Get lost in an urban forest in the heart of colonial Coyacán. (Gobierno de la Ciudad de México)

Mexican architect and environmentalist Miguel Ángel de Quevedo, also known as the Tree Apostle, dedicated a hectare of his own land for a plant nursery in 1901. By the 1930s, Viveros had become Coyoacán’s largest park. This verdant haven in the city’s south teems with towering trees and peaceful trails, as well as a healthy population of very friendly squirrels.

Size: 39 hectares

Hours open: 6:00 a.m. – 6:30 p.m.

Activities: Walk, run, bike, jump into a yoga class or fencing demo, have a picnic

Something unique: Hidden within the park are the ruins of a small chapel.

Parque Lincoln

This Polanco park is, as you may guess, named for U.S. President Abraham Lincoln, who famously opposed the invasion of Mexico between 1846 and 1848. Not a place to go jogging but certainly a place to enjoy the outdoors, Parque Lincoln is a quiet space which runs adjacent to some of Polanco’s trendiest restaurants and bars. Within its borders you can find sculptures, a botanical garden, an aviary and several ponds. There is an outdoor theater for live music concerts and festivals, notably the Polanco Jazz Festival in late November.

Size: 12 acres

Hours open: 24 hours

Activities: Strolling, relaxing on a bench, playing on a playground, shopping at the weekly tianguis

Something unique: On Sundays you can rent small motorized boats to race. While it’s meant for children, it always seems to be the fathers having all the fun.

Parque Nacional Los Dinamos

Los dinamos allows you to hike through the wilderness, all within the confines of the city. (Gobierno de la Ciudad de México)

If you want to do some real hiking or mountain biking, this is where you want to go. Explore more than 26 km of trails that cut through waterfalls, over the Magdalena River, past old factory ruins and up towering peaks that grant you snippets of Mexico City’s expanse. There are designated sections for camping if you want to brave an overnight among foxes and rabbits.

Size: 2,429 hectares

Hours open: 6:00 a.m. – 6:30 p.m.

Activities: Hiking, biking, rock climbing, rappelling, camping

Something unique: Climb up a wobbly ladder to Puerta del Cielo for great pictures and spectacular views.

Parque Nacional Desierto de los Leones

Desierto de los Leones is located on the westernmost edge of Mexico City and is home to nature trails and a convent, which was abandoned in the 19th century. (Sedema)

No, there are no lions. This national park in the borough of Magdalena Contreras, said to be named after the León family, is another alternative for serious hikers as well as history buffs. It’s home to miles and miles of trails that range from easy to challenging, some which lead to the beautifully-preserved Ex-Convento del Desierto de los Leones. The 17th-century Carmelite monastery features monks’ cells and a church.

Size: 1,800 hectares

Hours open: 6:00 a.m. – 5:30 p.m.

Activities: Hiking, biking, rock climbing, picnicking, horseback riding

Something unique: Find the famous secret garden set inside the walls of the ex-convent.

Bethany Platanella is a travel planner and lifestyle writer based in Mexico City. She lives for the dopamine hit that comes directly after booking a plane ticket, exploring local markets, practicing yoga and munching on fresh tortillas. Sign up to receive her Sunday Love Letters to your inbox, peruse her blog, or follow her on Instagram.

Guide to the unique world of Mexican candies

By

Ana Paula De la Torre

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July 25, 2024

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Mexican candies — Can you name all of these types of Mexican candy? No? Sounds like you need an explainer. (Paola García/Flickr)

The history of Mexican candy can be summed up in three words: honey, honey and more honey. In ancient Mexico, the population used honey extensively to create traditional sweets. The Nahua word “necuhtli” means honey, and early Mesoamericans had several types of it, including bee honey (miahua necuhtli), maguey nectar (menecuhtli) and aguamiel (iztac necuhtli) — many of which formed the basis for the first types of Mexican candy.

Honey has been a longstanding food source that added a mild flavor to prepared corn cobs and Mesoamerican preserves. Products made of corn and honey were offered to the gods and consumed during celebratory occasions. In ancient times, the Nahua people celebrated the birth of Huitzilopochtli with idols made of roasted and ground blue corn mixed with dark maguey honey.

Pepitorias, perhaps Mexico’s most colorful snack. (directoalpaladar.com.mx)

The renowned Florentine Codex, a manuscript created post-Conquest by Spanish missionary Bernardino de Sahagún and Indigenous Nahua collaborators also mentions the creation of a dough called tzoalli made from burst huauhtli (amaranth) seeds mixed with black maguey honey. This dough was used to make images of deities that were ritually consumed by the faithful in a form of theophagy. To this day, amaranth, a highly nutritious cereal native to Mesoamerica, is mixed with honey to make sweets like alegrías and the famous skulls for the Day of the Dead.

Sugar was introduced to Mexico by the Spanish during the 1520s, but it wasn’t until the 19th century that sugar cane became widely used across the country.

What makes Mexican candies different?

Mexican candies are notably influenced by two key ingredients of the region: chili and tamarind. Even candies meant for children in Mexico often incorporate chili. In fact, many of the top-selling candies in Mexico today would be considered spicy by foreign standards.

Tamarind, on the other hand, is a fruit known for its high content of vitamins B, C, and E, as well as fiber. Its distinctive flavor profile oscillates between spicy and sour, with a touch of sweetness. Mexican sweets often showcase these two unique ingredients.

A basic guide to traditional Mexican candies

Bolitas de tamarindo are about as traditional as Mexican candy can get. (Germán Torreblanca)

Let’s explore some traditional Mexican candies that have been enjoyed since colonial times and are still popular today, often found in traditional markets:

Alegrías: Made with toasted amaranth seeds and bound with sugar honey, this sweet is usually decorated with nuts or raisins.

Palanquetas: A bar made of peeled and shelled peanuts combined with piloncillo syrup and other grains like walnuts, amaranth and almonds. It was originally a sweet made from roasted and ground corn, mixed with honey to celebrate Papaquilizilhuitl, the Corn Festival.

Peanut palanquetas were originally created for a religious festival. (Adrián Cerón)

Pepitorias: Folded wafers of wheat or rice flour filled with melted piloncillo and pumpkin seeds, available in various colors.

Bolitas de tamarindo: These balls of tamarind paste are dusted with sugar. Some people make them with dulce de tamarindo, a mixture of tamarind, sugar and chili.

Borrachitos: First invented in Puebla, these creamy sweets are soaked in syrup and liquor like rum or tequila.

Cocadas: A chewy candy made with grated coconut, sugar and milk, cocada is often served in a scooped-out lime.

Dulce de leche: Also known as jamoncillo, this sweet is made with milk, sugar and chopped nuts.

Candied fruits: Fruits cooked with lime (similar to how corn nixtamal is prepared). Immersed in a lemon and water solution, they’re sweetened with sugar or piloncillo syrup to preserve them.

Commercial candies

Jamoncillo, better known as “dulce de leche,” is a type of milk fudge. (Macarrones/Flickr)

The world of Mexican candies is vast, and alongside traditional and artisanally produced confectionery are mass produced sweets you can get across the country and around the world.

Mazapán De La Rosa: Mazapán, known in English as marzipan, is a sweet made with sugar and almonds or peanuts. Mexico’s version uses the latter, and De La Rosa is without a doubt the best known mazapán in the country.

Pelón Pelo Rico: A tamarind and chili flavored squeeze candy, Pelo Rico is a favorite with children for the shapes it makes when it comes out of the bottle.

Pulparindo De la Rosa: Another De La Rosa product, Pulparindo is a spicy tamarind bar coated in salt and chili.

Vero Elotes: This corn cob-shaped lollipop is caramel flavored and coated with chili powder.

Duvalin: Similar to Dunkaroos, this creamy candy is available in hazelnut, strawberry and vanilla.

Tubs of Duvalin, a sweet dipping candy. (Ricolino)

These candies showcase the diverse and flavorful world of Mexican confectionery, combining traditional ingredients with unique flavors to create delightful treats enjoyed by people of all ages.

Which others would you add?

Ana Paula de la Torre is a Mexican journalist and collaborator for various outlets including Milenio, Animal Político, Vice, Newsweek en Español, Televisa and Mexico News Daily.

Are US military strikes against Mexican cartels on the table? Trump says ‘absolutely’

By

MND Staff

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July 25, 2024

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Donald Trump and J.D. Vance in an interview clip — Republican presidential nominee Donald Trump and running mate J.D. Vance discussed Mexican cartels in an interview with Fox News on Tuesday. (Fox News/screen capture)

Former United States President Donald Trump has said he could use the U.S. military against Mexican cartels if he is re-elected as president on Nov. 5.

In an interview with Fox News, the Republican Party’s presidential candidate was asked whether “strikes” against Mexican cartels — which ship large quantities of narcotics including fentanyl to the U.S — were “still on the table.”

A clip from the interview of Republican Party nominee Donald Trump and vice presidential candidate J.D. Vance with Jesse Watters.

“Absolutely,” Trump responded.

Fox News host Jesse Watters, who interviewed the 45th president of the United States and his 2024 running mate J.D. Vance, rephrased his question, asking Trump whether he was prepared to use military force against “our biggest trading partner.”

“Absolutely. Mexico’s going to have to straighten it out really fast or the answer is absolutely,” Trump said.

“They’re killing 300,000 people a year with fentanyl coming in,” he said, offering a figure that is almost triple the number of estimated drug overdose deaths in the United States in 2023.

Trump said that “Mexico is going to be given a very short period of time to police their border” and if they don’t do the job effectively, his government will take action.

“I’m sure they’re going to do not well and then you’re going to see the action start,” he said.

Trump asserted that “Mexico is petrified of the cartels because they’ll take out a president in two minutes.”

“They’re petrified of the cartels. The cartels are running Mexico,” he said.

AMLO and Trump in the White House in 2021. (Archive)

The New York Times reported in late 2023 that Trump, while president, “talked privately about shooting missiles into Mexico to take out drug labs.”

The Times also said that “Republican lawmakers have drafted a broad authorization for the use of military force against cartels” and “pushed for designating Mexican cartels as foreign terrorist organizations.”

“… If Mr. Trump returns to the White House in 2025, he has vowed to push for the designations and to deploy Special Operations troops and naval forces to, as he put it, declare war on the cartels,” The Times said in October 2023.

Rolling Stone reported in May that “if he wins a second term in November, Donald Trump wants to covertly deploy American assassination squads into Mexico soon after he’s sworn into office again, according to three people who’ve discussed the matter with the former U.S. president.”

President López Obrador has categorically rejected the idea that the United States military could be used in Mexico. In 2019, he declined an offer from Trump to help Mexico combat organized crime after an attack on members of an extended Mormon family in northern Mexico that killed three women and six children.

Vance: Mexico in danger of becoming a “narco-state”

Senator Vance, unveiled as Trump’s vice president pick last week, defended the plan for United States forces to target Mexican cartels given the damage they inflict on the U.S.

“It’s funny that people accuse us of being bombastic for saying the cartels — we need to go after them. What about American citizens who are losing their lives by the tens of thousands, hundreds of thousands, because we won’t do something serious about the cartels? That is what’s reckless,” he told Fox News.

“… I actually believe that the Mexican government, even though they couldn’t say that, want President Trump to be serious about the cartels because that poison [fentanyl] is destabilizing their country too. Fourteen billion dollars coming into the cartels, and that was a couple of years ago, it’s probably more today,” Vance said.

“They’re not going to be a real country anymore, they’re going to become a narco-state unless we get some control over this,” he asserted.

Mexico News Daily

Chinese investment in Mexico has risen fast, but still lags behind other FDI

By

MND Staff

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July 24, 2024

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Mexican and Chinese business people at Hofusan Industrial Park — There has been a lot of attention on Chinese companies increasingly investing in manufacturing in Mexico in recent years. (Hofusan Industrial Park NL/X)

Chinese investment in Mexico has increased significantly in recent years, but the East Asian nation is still a long way off matching the outlays of countries such as the United States and Spain.

Economy Ministry (SE) data shows that Chinese foreign direct investment (FDI) in Mexico totaled US $2.073 billion between 2006 and March 2024. Just over 55% of that amount was invested in the country since 2020.

Chart showing annual flow of FDI from China to Mexico from 2000 — This chart shows the FDI in Mexico from China since 2000. (Data México/SE)

Chinese investment in Mexico peaked in 2022 at $569.7 million, a figure that accounts for 27% of the country’s total FDI in Mexico over the past 18 years.

The amount represented an increase of 335% compared to 2017, 845% compared to 2012, and a whopping 4,534% compared to 20 years earlier in 2002.

China was among the top 10 investors in Mexico in 2022, but its total investment was dwarfed by that of the United States, whose FDI in Mexico totaled $20.2 billion that year, according to the SE.

China was not among the top 10 investors in Mexico last year, with its FDI falling to $159 million, nor was it among the top 10 in the first quarter of 2024.

The top 10 countries of origin for foreign direct investment in Mexico in 2023 did not include China. (SE)

China’s total investment in Mexico between 2006 and the first quarter of 2024 represents just a small fraction of the FDI of countries such as the United States and Spain.

The Reforma newspaper reported Tuesday that the United States’ FDI in Mexico between 2006 and the first quarter of this year was just over $239 billion, while Spain’s outlay during the same period was just under $57.5 billion.

Why does the data matter?

There has been a lot of focus on Chinese investment in Mexico lately, with several media outlets, including the BBC and The Economist, reporting that Chinese companies are using Mexico as a “backdoor” to the United States as products made here can be exported tariff-free to the U.S.

Increasing attention is also being given to the increase in Chinese exports to Mexico, and the proliferation of Chinese-operated wholesale establishments in downtown Mexico City.

A street vendor sells Hello Kitty merchandise on the sidewalk — Local retailers in the historic center say they have been pushed out by Chinese businesses that sell cheap products to street vendors. (Cuartoscuro)

The data on Chinese investment in Mexico is important as it indicates that Chinese companies have not yet collectively established an overly significant presence in the Mexican economy, despite claims — or impressions — to the contrary. Companies from the United States, Canada, Spain, Germany and various other countries have invested much more in Mexico than Chinese firms.

Jorge Guajardo, a former Mexican ambassador to China and a close observer of Chinese investment in Mexico, said on X that the data showing much greater investment in Mexico by the U.S. and Spain than China provides “context for those who claim China is using Mexico as a manufacturing base to enter the U.S.”

Does the data reflect all Chinese FDI in Mexico?

As Mexico News Daily reported in late 2023, it appears that not all Chinese money that flows into Mexico is counted as such.

The reason, according to Enrique Dussel Peters, an economist and coordinator of the Center for Chinese-Mexican Studies (Cechimex) at the National Autonomous University, is that some Chinese investment comes into Mexico via United States subsidiaries of Chinese companies.

The FDI inflow is thus recorded as coming from the United States, when for all intents and purposes the money came from China.

According to Cechimex, Chinese investment in Mexico between 2001 and late 2022 totaled $17 billion, more than six times higher than the amount recorded by the SE between 1999 and March 2024.

China is not yet a top investor in Mexico, but it could be soon

While China is not yet close to matching the outlay of the top investor nations in Mexico, the situation could change — if Chinese companies act on their investment announcements.

According to the SE, Chinese companies made investment announcements totaling $13.19 billion last year. China was second in the “expected investment” rankings in 2023, behind only the United States.

Two Chinese companies, LGMG and Jetour, made announcements totaling $8 billion last year, or over 60% of the total expected FDI for China. As the $13 billion has only been announced, rather than invested, it has not yet shown up in the Economy Ministry’s FDI data.

BYD car in production — According to the Chinese company’s Mexico director, the proposed BYD EV plant would generate 10,000 jobs. (BYD México)

This year, leading electric vehicle manufacturer BYD is among the Chinese companies that have committed to invest in Mexico. It has not yet announced how much it intends to invest in a plant in Mexico or where it will be located, but the outlay on a facility that is slated to create 10,000 jobs would be significant.

If LGMG, Jetour, BYD and other companies go ahead with their announced projects — which is no certainty — China could shoot up the FDI rankings for Mexico in the near future.

One potential barrier to future Chinese investment in Mexico is Mexican government opposition to it.

While Mexico is currently welcoming Chinese investment, Finance Minister Rogelio Ramírez de la O said last Saturday that the government is “considering” changing its investment policy with regard to China. Without providing specific details, he suggested that Mexico could seek to prevent or limit Chinese investment in some sectors.

With reports from Reforma

Peso slides after Tesla setback and inflation spike

By

MND Staff

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July 24, 2024

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Image of US currency bills of various denominations in a pile around a single Mexican peso coin, which hit a a 4-month high on Friday — Despite tariff uncertainty, the peso hasn't been this strong since November. (Shutterstock)

Tesla CEO Elon Musk’s statement that the company’s planned “gigafactory” project in Mexico is currently “paused” was among the factors that caused Mexico’s peso to depreciate against the U.S. dollar on Wednesday morning, according to Mexican economic analyst Gabriela Siller.

Compared to its closing position on Tuesday, the peso depreciated around 1.5% to reach 18.42 to the greenback on Wednesday morning, according to Bloomberg data.

La depreciación del peso hoy se debe a 1) reforma al Poder Judicial, 2) decisión de Tesla de aplazar hasta después de las elecciones de EEUU la decisión de venir a México y 3) la publicación de la inflación en México que se aceleró nuevamente.

— Gabriela Siller Pagaza (@GabySillerP) July 24, 2024

Banco Base analyst Gaby Siller’s X post in which she cited Elon Musk’s announced decision to pause Tesla’s gigafactory construction in the state of Nuevo León as a factor in the peso’s drop in value.

The currency subsequently recovered slightly to trade at 18.37 to the dollar shortly after 5 p.m. Mexico City time.

Siller, director of economic analysis at Mexican bank Banco Base, attributed the depreciation of the peso to three factors:

Concern about the government’s proposed judicial reform.
Tesla’s announcement that it will “postpone” a decision about the planned Nuevo León gigafactory until after the Nov. 5 presidential election in the United States.
The publication of data on Wednesday that showed that inflation in Mexico continued to increase in the first half of July.

The judicial reform

Siller said that the proposed judicial reform — which could be approved by Congress as soon as September — “generates fear because it could damage legal certainty” in Mexico.

Such a scenario, she added, “would considerably affect investment growth in Mexico.”

The reform, if approved, would allow Mexicans to directly elect Supreme Court justices and other judges from candidates that would be nominated by the sitting president. Critics argue that the reform would weaken rather than strengthen the judiciary.

After Morena candidate Claudia Sheinbaum and the ruling Morena party won comprehensive victories in the June 2 presidential and congressional elections, the peso depreciated sharply on concerns that the new Congress could approve the proposed judicial reform and other controversial constitutional reform proposals put forward by President Andrés Manuel López Obrador, including one that aims to disband a range of autonomous government agencies.

Claudia Sheinbaum at a meeting with legislators — Morena Party President-elect Claudia Sheinbaum’s victory on June 2 has reignited concerns that a judicial reform bill coming up for vote in September may pass easily, as the election results also gave Morena lawmakers majorities in both houses of Congress. The Morena-proposed bill would make Supreme Court justices directly elected officials nominated by the president. (Cuartoscuro)

What did Musk say about the Mexico Tesla gigafactory?

During Tesla’s Q2 earnings call on Tuesday, Musk was asked for an “updated timeline” for its proposed US $10 billion Nuevo León gigafactory, which the company first announced in March 2023 but hasn’t started building.

“We currently are paused on Giga Mexico. I think we need to see where things stand after the [U.S. presidential] election. Trump has said he’ll put heavy tariffs on vehicles produced in Mexico,” he said.

“So it doesn’t make sense to invest a lot in Mexico if that is going to be the case. So we kind of need to see the way things play out politically,” the Tesla CEO added.

In an X post on Tuesday, Siller said that if Trump wins the U.S. election on Nov. 5, “it’s possible that Tesla will never arrive in Mexico.”

Trump has threatened to impose tariffs on vehicles made in Mexico by Chinese companies, but he hasn’t publicly announced any plan that would affect vehicles made here by Tesla, a U.S. company based in Austin, Texas.

Various observers questioned the cogency of Musk’s remarks.

A tale of two interest rates and Mexico’s peso

Mexican national statistics agency INEGI reported Wednesday that Mexico’s annual headline inflation rate increased to 5.61% in the first half of July. In better news, the annual core inflation rate, which excludes volatile food and energy prices, fell to 4.02%, continuing a downward trend that began in early 2023.

Some analysts believe that the Bank of Mexico will cut its key interest rate on Aug. 8 due to core inflation’s continuing decline. Such a move could affect the peso adversely as it would reduce the differential between the Bank of Mexico’s key interest rate (currently 11%) and that of the United States Federal Reserve (5.25%–5.5%), provided the Fed doesn’t cut its federal funds rate next week.

The peso has benefited for an extended period from the significant difference between the two interest rates.

The peso appreciated to an almost nine-year high of 16.30 to the dollar in April, but it depreciated to 18.99 to the greenback not long after the elections.

At 18.37 to the greenback, the peso is 7.4% weaker than it was just before Mexicans went to the polls on June 2.

With reports from El Financiero and Debate

Airbus Helicopters and ITP Aero expanding operations in Querétaro

By

MND Staff

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July 24, 2024

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Airbus employee in a factory hangar working on an aircraft — Airbus will add 600 new jobs in Querétaro with its expansion of its facilities in Colón, Querétaro. (Airbus)

Aerospace companies Airbus Helicopters and ITP Aero will be expanding their existing facilities in Querétaro, adding a total of 800 jobs in the state, according to announcements made by the companies. and the state government.

The announcements were made on the three parties’ social media accounts during the Farnborough International Airshow in the United Kingdom, which began Monday and lasts until Friday.

Officials with ITP Aero pose in a horizontal line with Queretaro Governor Mauricio Kuri in front of an artistic turbine display. — ITP Aero and Airbus officials both announced their expansion plans after signing agreements with Querétaro Governor Mauricio Kuri, center, at the Farnborough International Airshow in Hampshire, England this week. Here, Kuri poses with ITP Aero heads, including Group CEO Eva Azoulay to his left and General Director Carlos Alzola to his right. (ITP Aero)

Querétaro, a state in central Mexico, is well-known as a hub for aerospace manufacturing, as well as for factories owned by foreign automotive and electronics manufacturing companies.

Querétaro Governor Mauricio Kuri González celebrated the news of the two companies’ expansion in his state on the social media platform X, crediting Querétaro residents’ talent.

ITP Aero creating 200 new jobs

According to Kuri, the ITP Aero expansion of its production center in Querétaro will add 200 new jobs in the state; that’s in addition to 200 jobs created by the company in Querétaro last year.

In a video shared on social media, Kuri noted ITP Aero’s contribution to Quéretaro’s development as an aerospace industry center: it was the first company in the field to settle in the state 26 years ago.

“After this company arrived, all the others followed,” Kuri said, adding that the state was “very grateful” for the trust ITP had shown in Querétaro.

Airbus Helicopters Executive Vice President of Operations Laurent Mazoue and Queretaro Minister of Sustainable Development Marco Antonio del Prete shake hands while posing for a photo and holding up an agreement between Airbus and the Queretaro government — Airbus Helicopters Executive Vice President of Operations Laurent Mazoué, left, signed its expansion agreement with Querétaro officials, saying that the state is “one of the pillars of our industrial strategy.”

General Director of ITP Aero Carlos Alzola Elizondo noted the aerospace industry’s growth and the relevance of the products the company manufactures in Querétaro.

“Our plant is growing; aeronautics is growing and so is our presence in Querétaro,” Alzola said “We are very grateful for the support we have received to continue growing ITP’s industrial activity.”

ITP Aero, a Spanish company, designs, develops and manufactures aeronautical industrial engines and components for commercial and defense aviation. It employs more than 5,000 people across facilities in Spain, the U.K., Mexico, the United States, Malta and India.

Querétaro, crucial for Airbus’s expansion

At the event, Querétaro and Airbus Helicopters officials also signed an agreement to expand the company’s industrial activities and new production processes at Airbus’s manufacturing plant. In a post on X’ Kuri said that this investment will amount to US $49 million and will help create 600 jobs.

The expansion responds to the transformation of the company’s global supply chain and seeks to address the increased production of Airbus single-aisle commercial aircrafts.

The company’s Executive Vice President of Operations Laurent Mazoué said that “this expansion is further proof of Airbus Helicopters’ commitment to continue investing in Mexico’s aeronautical industry,” as Querétaro is “one of the pillars of our industrial strategy due to its competitiveness, the skills of its teams and its ability to satisfy our customers.”

The French company’s Querétaro plant produces hatches, emergency exit doors, bulk cargo doors and cargo doors for single-aisle and wide-body aircraft. It also produces subassemblies and modules for helicopters for Airbus final assembly lines and Airbus plants in Europe.

With reports from El Economista and Reforma

Mexico’s rhythmic gymnastics team to make Olympic debut

By

MND Staff

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July 24, 2024

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Mexico’s rhythmic gymnastics team holding Olympic rings — Mexico’s rhythmic gymnastics team will compete in their first-ever Summer Olympics. (CONADE)

Mexico’s rhythmic gymnastics team is preparing to compete in its first-ever Summer Olympics.

In a sport dominated by Russia, Bulgaria, Spain and other European countries, the five-woman Mexico squad qualified with a silver medal at the Pan American Games last year in Santiago, Chile, earning them a ticket to Paris.

The Mexican rhythmic gymnastics team — The individual all-around competition begins on Aug. 8 at the new Porte de la Chapelle Stadium in Paris. (CONADE)

“The moment when we qualified for the [2024] Olympic Games was very spectacular,” recalled team member Adirem Tejeda from Mérida, Yucatán. “We hugged each other. We cried. The countries of Venezuela and Colombia came over and also congratulated us. It was very nice to feel the sisterhood.”

Rhythmic gymnastics has been an Olympic sport since 1984 as an individual event; the group competition was added in 1996.

Mexico’s team, under the direction of head coach Blajaith Aguilar Rojas, will make its Olympic debut when the individual all-around competition begins on Aug. 8 at the new Porte de la Chapelle Stadium in the 18th arrondissement.

In total, 94 rhythmic gymnasts will be competing — 24 individuals and 14 teams (with five athletes per team).

Mexico’s team is composed of Tejeda, 22; Dalia Alcocer, 20, also from Mérida; Sofia Flores, 19, from the state of Coahuila (city not available); Kimberly Salazar, 20, from Xalapa, Veracruz; and 16-year-old Julia Gutierrez, also from Mérida.

The Mexican athletes say their routines will honor three of the Louvre Museum’s most famous works: the Mona Lisa, the Venus de Milo and Diana of Versailles, a statue that depicts the Roman goddess of hunting and wilderness.

Mexico's rhythmic gymnastics team en route to Paris. — Mexico’s rhythmic gymnastics team en route to Paris. (Facebook)

In rhythmic gymnastics, often described as “expression through movement,” athletes perform leaps, balancing maneuvers and flips on a huge floor mat while handling an apparatus. The musical accompaniment plays a significant role.

In Paris, there will be four exercises in the individual all-around competition: hoop, ball, clubs and ribbon. There will also be two exercises in the group all-around competition, involving five hoops, three ribbons and two balls.

In qualifying for the 2024 Games, the Mexican team beat out Brazil for the silver medal at the Pan American Games in November 2023, a competition in which Mexico won a record 52 gold medals.

Much of the team’s success has been attributed to Aguilar, a native of Jalisco who started in gymnastics at age 7. One of her early mentors at a State Council for Sports Promotion (CODE) training center in Jalisco was a coach from Bulgaria, Ivanka Tchakarova.

“Thanks to her, I have a passion for rhythmic gymnastics,” Aguilar recalled. “I remember sitting with her at CODE Jalisco. She was explaining to me why a jump attempt was worth it, and why it didn’t matter if the judge deducted points” if the move wasn’t perfect.

As an athlete, Aguilar was part of the team that won the bronze medal at the 2007 Pan American Games in Rio de Janeiro, Brazil. She has been the team’s head coach since 2016.

The opening ceremony of the 2024 Summer Games will occur on Friday, with springboard diver Alejandra Orozco and modern pentathlete Emiliano Hernández representing Mexico as flagbearers. Each country’s delegation will be sailing in boats on the Seine River.

Men’s soccer and rugby sevens started on Wednesday, July 24, and on Thursday, women’s soccer, handball and archery will get underway. Mexico’s athletes are expected to bring home at least a few medals at the 2024 games.

In Mexico, the Paris Olympics can be followed on television on Channels 5 and 9, TUDN and Claro Sports.

With reports from Reforma, Infobae and La Jornada Maya