The issue of Chinese EVs being allowed into the North American market are part of the trade discussions with the United States, Mexico’s Secretary of Foreign Affairs Roberto Velasco Alvarez told reporters in Ottawa Friday.
Alvaraez was in Ottawa Friday for a bilateral meeting with Foreign Affairs Minister Anita Anand.
“Of course, this is part of the USMCA talks, and we continue to look for ways as well to lower the tariffs that the United States has implemented (on Mexico),” he said, when asked if the Chinese electric vehicles being sold in Mexico were an impediment to the Canada-U.S.-Mexico Free Trade Agreement (CUSMA) being extended.
The trade deal, known as USMCA in the U.S. and T-MEC (Tratado entre México, Estados Unidos y Canadá) in Mexico, dictates virtually all free trade on the continent.
On July 1, the United States Trade Representative Jamieson Greer said the U.S. is not renewing CUSMA “in its current form” — but the trade agreement will remain in place and face annual reviews as negotiations continue.
This decision triggers a rolling annual review for up to a decade, at which point it will expire if an extension isn’t agreed upon.
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The sale of Chinese-made electric vehicles in the North American market is a sticking point for Washington.
Chinese EVs now make up around 20 per cent of Mexico’s auto market. In January, Canada agreed to allow up to 49,000 Chinese electric vehicles into Canada at a “most favoured nation tariff rate” of 6.1 per cent.
The deal with China has raised concern within the Trump administration, with Trump himself threatening new tariffs and saying he won’t allow Canada to become a “drop-off port” for Chinese vehicles to enter the U.S.
The 49,000 Chinese EVs being let into Canada every year will make up less than three per cent of the Canadian market, Anand said.
“The key really is in establishing those lines. We are cognizant that the trading relationship across North America is one of the most integrated in the world,” she said.
Mexico’s import of the EVs is “mainly the lowest cost vehicle sector,” Alvarez said.
“We don’t have a large manufacture of Chinese vehicles in Mexico right now. I don’t think there’s more than one Chinese manufacturer in Mexico. At this point, we import vehicles from China for mainly the lowest cost vehicle sector of our market,” he said.
Alvarez was also asked whether Mexico would also consider going it alone and sign a bilateral agreement with the U.S. instead of a larger free trade deal with Canada in it.
“The USMCA is a trilateral agreement. And of course, we, the three countries, agree that architecture should continue,” he said, adding, however, that all parties had “bilateral issues” that needed to be resolved.
“Of course, when it’s appropriate, we have trilateral conversations,” Alvarez said.
“There’s also excellent communication between our trade teams. But of course, there are many issues with which we need to communicate directly with the United States,” he added.
Anand said both bilateral and trilateral conversations were key to establishing the trade relationship.
“With both the United States and Mexico, the trade and investment relationship is fundamentally important. And we are committed to protecting and strengthening those relationships, both bilaterally and trilaterally,” she said.
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