Faced with threats from the elected candidate for the presidency of the United States, Donald Trump, to impose 25% tariffs on Mexican imports, the Bank of Mexico (Banxico) highlighted the benefits that the trade relationship has brought to North American nations. , and assured that more than trading partners, the three countries are production partners.
“More than representing a simple tariff reduction scheme, the USMCA could be seen as a set of institutional rules that govern free trade and investment between Canada, Mexico and the United States to promote both trade flows, investment and production chains. in this region,” said the governor of the central bank, Victoria Rodríguez, at a press conference.
He pointed out that the channels through which the benefits of the trade agreement have been accumulated are diverse, from those related to employment and competitiveness, on the production side, and also greater access to goods at prices lower than those they would have. in the absence of integration.
“These benefits are also reflected in intraregional direct investment. The United States is the largest destination for Mexican and Canadian investment and Mexico and Canada together receive 11% of US foreign direct investment. This positive trend is benefiting the three countries that make up this treaty,” he said on the occasion of the quarterly inflation report.
Read: Banxico improves economic growth estimate for 2024 and maintains that of 2025
He added that the trilateral economic relationship has helped the region’s manufacturing industries, especially the automotive industry, to become more competitive globally through greater economic integration and the development of regional supply chains.
“The USMCA has led to deeper supply chains and, particularly, in this (automotive) sector, the minimum regional content was increased from 62.5% to 75%. The greater economic integration of the region has generated positive gains for the three economies and has allowed this region to remain competitive in the face of global competition,” he added.
‘Premature to point out possible effects of Trump’s measures’
He warned that although there is uncertainty about the economic policies that Trump will implement, it would be premature to talk about the possible implications because there is not enough information; However, he assured that the central bank will remain attentive to observe what is decided and its possible implications in the short and medium term, on economic activity, inflation and on the economic outlook.
“We should not jump to conclusions. This does not mean that we are not considering different scenarios so that, at the time, we can communicate the implications that this could have, if it occurs, on the inflationary outlook and the economic outlook in general,” stated Victoria Rodríguez.
He stressed that Mexico has solid macroeconomic fundamentals and one of them is the existence and credibility of the central bank, which strengthens the country’s resilience, since its actions are focused on preserving the stability of the purchasing power of the currency, for the benefit of the population.
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