U.S. President Biden delivers remarks at reception celebrating Asian American, Native Hawaiian, and Pacific Islander Heritage Month, at the White HouseWASHINGTON - The Biden administration's new tariffs on Chinese electric vehicles and other strategic sectors aim to protect the future of U.S. manufacturing, but they will likely accelerate a shift of Chinese production to Mexico, Vietnam and elsewhere to avoid them.
With that surge, concerns have grown about Mexico becoming a transshipment hub for Chinese goods to skirt U.S. tariffs, due to increasing U.S. imports of steel products from Mexico and Chinese EV maker BYD scouting out locations for a Mexican factory that could potentially supply the U.S. market. Reuters reported last month that U.S. officials have pressured Mexico to refuse investment incentives to Chinese automakers.
Another USTR official, senior adviser Cara Morrow, told Reuters in an interview prior to the China tariff announcement that the trade agency has been engaging with Mexican counterparts about ways to reduce the rising transshipment of Chinese steel and aluminum through Mexico. USTR is discussing Mexico's anti-dumping duties on steel and aluminum and better monitoring imports and exports of the metals and other steps in "difficult" negotiations, but Mexican officials also see Chinese overproduction as a threat to their own economy, Morrow said.
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