we are between the horses' legs – El Financiero

He president biden signed a decree yesterday that increases tariffs on electric cars from China from 25 to 100 percent.

Add to that other increases in batteries, solar panels, aluminum, steel, semiconductors and some other products that, together, are estimated to have an impact of 18 billion dollars in the costs of imports from China.

Biden's decision comes in the context of the electoral campaigns, since Trump threatened to increase the tariff on all Chinese imports to 60 percent.

So the candidates they seem to be competing for whom he adopts an attitude more aggressive against China.

Although Mexico would like to watch the bulls from the sidelines and simply contemplate how the two main economic powers in the world fight in commercial terms, it will not be able to do so.

De facto, we are involved in that contest and we can be affected.

Mexico displaced China as the main supplier to the United States.

One of the effects that this new wave of trade punishments against China may have is to generate even more space for Mexican products.

In the first quarter of this year, the percentage of US imports from Mexico reached 15.6 percent. In contrast, China's was 13.6 percent.

As a reference, these two points of advantage that Mexico has over China mean approximately, in annual terms, 60 billion dollars additional exports.

A further drop in purchases from China could imply an additional opportunity for Mexico.

But, the matter is more complex.

One of the strategies of thes chinese companies for a couple of years is investing in Mexico.

We have already discussed previously the registration difficulties that exist to really know the volume of Chinese investments in Mexico.

But what we can know is that the imports from China in Mexico they are gone up.

In the first quarter of 2019 they represented el 18 percent of the total; In the same period this year they rose to 20.5 percent.

In contrast, imports from the US were the 45.5 percent of the total five years ago and now they are only the 41.4 percent.

Tariff penalties on China and, above all, the promise that they will not allow Chinese products to enter “through the back door”, that is, through the installation of plants in Mexico, can lead to reduce Chinese investment in our country.

What's more, yesterday, the US trade representative, Katherine Tai, indicated that she is speaking with workers and industrialists regarding the possibility of applying tariffs to products from Mexico.

Don't rule out that the protectionist push we are seeing in the United States, from both parties, could affect our country.

And all this happens long before The time comes for the USMCA review.

Imagine how things are going to turn out when we have that process over.

For now, what is a fact is that the geopolitical conflict between the United States and China It will not leave us unaffected.

And you have to work and properly calculate how to respond.

As I have told you, I hope that the two candidates will not be surprised when they realize that we are between the horses' legs.