Mexico contemplates replacing Chinese imports to bolster domestic economy
Photo: I-Xsport.
Mexico’s Secretary of Finance and Public Credit, Rogelio Ramírez de la O, stated that the Mexican economy could grow by an additional 1.4 percentage points if the country manages to replace imports from China.
During a tour alongside President-elect Claudia Sheinbaum, Ramírez de la O mentioned the need to reevaluate the trade relationship with China, as the Asian country “sells to us and does not buy from us”, which does not constitute reciprocal trade. Mexican President Andrés Manuel López Obrador, known by his initials as AMLO, stated that although Mexico is an open economy and does not seek to completely eliminate Chinese imports, it is essential to reduce them in order to move towards self-sufficiency.
Ramirez de la O indicated that if 10% of what is currently imported from China could be produced in North America, Mexico’s Gross Domestic Product (GDP) could increase by 1.4 percentage points. He claimed that this would also benefit the United States and Canada, increasing their GDPs by 0.8 and 0.2 percentage points, respectively.
In addition, it is estimated that import substitution would generate an increase in employment: 560,000 new jobs in Mexico, 600,000 in the United States and 150,000 in Canada.
The Secretary of Finance revealed that Mexico already has a list of products that could be substituted in key sectors such as medical equipment, pharmaceuticals, electronics, metal-mechanics, automotive parts and electrical and non-electrical machinery. However, he did not provide specific details on how this import substitution plan would be implemented.
In a morning press conference, AMLO highlighted that Mexico has replaced China as the United States’ main trading partner, which he considers a significant steo forward in trade relations with the U.S.
From the start of AMLO’s administration in 2019 until June 2024, tax collection has reached almost 21 trillion Mexican pesos, 13.1% more in real terms than in the previous period. Sheinbaum has stated that a possible tax reform in her administration should be consensual and has no immediate plans to implement one.
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