The Confederation of Chambers of Customs Agents of the Mexican Republic (CAAAREM) described as a low blow the 25% general tariff imposed by the United States on Mexican products as of this Tuesday.
Its president, Miguel Cos Nesbitt, regretted that this measure will make Asia, the region with the most dynamic economic growth in the world, and the BRICS even more competitive.
“With this decision, the Asian countries and the BRICS bloc are strengthened and will use the opportunities that North America is losing today,” said Miguel Cos Nesbitt, president of CAAAREM, in a press release.
CAAAREM
The BRICS countries play a crucial role in the global economy as major savers. In 2023, its member countries were estimated to generate an annual net trade surplus of $780 billion.
Western financial markets have historically been the most capable of absorbing these surpluses, and for many years, they fulfilled this function. However, this system peaked in 2014. Since that time, the BRICS have begun to reduce their dependence on Western markets. According to Seabridge Gold, this decision is driven by three key factors: currency inflation, sovereign debt risk and the threat of sanctions.
Integration
Many economists recognize NAFTA as a key factor in improving the competitiveness of U.S. manufacturing industries, especially in the automotive sector. This agreement allowed for the development of more efficient supply chains in North America.
A significant portion of U.S.-Mexico merchandise trade occurs under production sharing, where manufacturers in both countries collaborate to create products.
The flow of intermediate inputs from the United States to Mexico and the return of finished goods has greatly increased the importance of the U.S.-Mexico border region as a production hub.
According to a U.S. congressional analysis, U.S. manufacturing industries, such as vehicles and electronics, rely heavily on Mexican manufacturers. In the automotive sector, for example, there are complex connections between suppliers and assembly points in both countries.
On March 4, Trump ordered the implementation of new general tariffs of 25% for Mexico and Canada, and 10% for China. However, the tariff applied to Canada has an exception: energy-related products, such as oil and gas, will have a 10% tariff.
“We regret that the United States has dealt a low blow to the area’s free trade and competitiveness by moving back towards a protectionist model that will undoubtedly have significant consequences on supply chains, inflation and the prices that its consumers will now have to pay,” criticized Cos Nesbitt.