Finance

Auto industry targeted by Trump is important to Mexico

Auto industry targeted by Trump is important to Mexico June 11, 2018Leave a comment
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MEXICO CITY (Mexico): While US President-elect Mr . trump hopes to assemble the brakes on projects by Toyota and American automakers in Mexico, the land has developed into a global powerhouse relating to making cars.

Mexico will be the world’s fourth exporter and seventh producer of vehicles, which might be made in 14 with the country’s 32 states, as outlined by industry figures.

The US$52 billion annually industry represents some 875,000 jobs in Mexico, in accordance with the economy ministry.

But us states president-elect would like to bring those jobs back to north america.

Trump threatened on Thursday to impose a stiff tariff on Toyota if this undergoes with wants to build a new factory in Mexico as opposed to making it in the usa.

On Tuesday, he earned an identical threat against Automobile, while Ford announced the cancellation on the new US$1.6 billion Mexican factory that Trump had criticised within the presidential campaign.

Free trade deals

The purposes why Mexico is indeed easy for foreign investors is its relatively low wages, its proximity to the US market along with the free trade deals the continent has with 46 countries.

The main pact will be the North American Free Trade Agreement (NAFTA) that Mexico enacted with the Us and Canada in 1994.

But Trump needs to renegotiate NAFTA, threatening to withdraw if he can’t have a better deal for that Country.

Export machine

Some 80% of vehicles manufactured in Mexico are exported. Each one is foreign companies as Mexico does not have a brand.

While cars are shipped to 100 countries, three-quarters from the vehicles earned in Mexico are delivered to the country and over 10% go to Canada.

In the very first 11 months of 2016, GM led vehicle exports from Mexico with 495,790, then Nissan (464,877), Fiat Chrysler America (404,160) and Ford (351,691), in accordance with the Mexican Automobile Industry Association.

Toyota was ninth out from 10 auto makers with 124,439 vehicle exports.

-AFP

 

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