China gives Mexico stiff warning over tariffs seen appeasing US

BEIJING – China urged Mexico to “think twice” before levying tariffs, a warning that could signal Beijing’s willingness to retaliate over a move it sees as giving in to demands from the US. 

“Any unilateral tariff increase by Mexico, even within the framework of WTO (World Trade Organisation) rules, would be seen as appeasement and compromise towards unilateral bullying,” a spokesperson for the Ministry of Commerce said in a statement on Sept 11. “We urge the Mexican side to exercise extreme caution and consider carefully before taking any actions.”

Mexico has come under growing pressure from US President Donald Trump’s protectionist stance on trade, particularly his push for steep tariffs on Chinese goods. The Latin American country announced plans on Sept 11 to

impose duties of as much as 50 per cent

on cars and other products made by China and several Asian exporters.

Mexican President Claudia Sheinbaum, who is preparing for talks on North America’s free trade deal, later insisted she does not seek conflict with China but instead wants to protect domestic industry.

China’s exports to Mexico have nearly doubled since 2016, the year before Mr Trump started his first term in office, in part because Chinese companies moved operations there to avoid tariffs.

But it has become increasingly difficult for countries caught in the middle between Washington and Beijing to navigate bilateral relationships with the two superpowers as Mr Trump pushes trading partners to increase levies on China. 

Bloomberg Economics analyst Chang Shu said: “Beijing will likely hit back with reciprocal tariffs immediately, but risks alienating partners at a time when it critically needs allies. Over time, it may also encourage firms to localise production in partner countries, though that would come at the cost of weaker output and jobs at home.” 

China runs a substantial trade surplus with Mexico. In 2024, it exported US$71 billion (S$91 billion) more than it imported, according to China’s Customs data. 

Mexico accounted for about 5 per cent of China’s copper ore imports in January to July, as the Asian nation’s smelters try to secure every tonne of raw material they can in a tight global market. 

While copper ore and concentrates could be a potential target for retaliation, Mexico would likely be able to find other customers given strong demand for the metal essential for the renewable energy industry.

The biggest producer of copper in Mexico is US-based Southern Copper, a part of Mexican billionaire German Larrea’s Grupo Mexico. BLOOMBERG