If Donald Trump, President of the United States, imposes 25% tariffs on various Mexican products , Mexico’s Gross Domestic Product (GDP) would fall by almost 4%, estimated Rolando Paniagua, director of business expansion at Banco Base , who said that if the tariff measure were to be implemented “it would put the Mexican economy in serious trouble.”
In the framework of the Foreign Trade Congress. Globalization, trade agreements and geopolitics: Impact on business growth , organized by Concanaco Servytur , Paniagua recalled that in the case of tariffs on steel and aluminum , Mexico has a deficit with its northern neighbor, and noted that the measure would come into effect immediately on March 12.
He said that this situation already occurred in 2018-2019, and Mexico benefited from this tariff imposition on steel and aluminum by the United States. He indicated that the country’s exports to its northern neighbor increased by 7.48% from June 2018 to May 2019, compared to the previous 12 months.
“Mexico has benefited from this situation because exports of these materials to the United States have increased. We will see what can be negotiated and done between now and March 12,” he stressed.
The specialist considered that the scenario of the Mexico-United States relationship will be very complicated, due to Trump’s threats , for which, the country must be ” prepared to face this environment of uncertainty and volatility, because the threats will continue .”
He said that companies must be resilient to emerge from this situation, and that they must implement new strategies.
Areas of opportunity in foreign trade
At the conference Foreign Trade in Transformation: Challenges and Opportunities for Mexico , Carlos Palencia, general director of the Maquiladora and Export Manufacturing Industry (Index) , considered that the pattern of world trade is being dictated by the government and not by the business sector, as is happening in the United States with Donald Trump’s threats.
During his participation, he said that manufacturing companies, known as IMMEX (Manufacturing, Maquiladora and Export Services Industry), are the ones supporting the Mexican economy , since there are more than 6,500 productive and service companies.
He indicated that he has an IMMEX 4.0 proposal for the development of suppliers in order to be less dependent on a supplier, for example, an Asian one, and for companies to be more productive.
In turn, César Morales, consultant and academic, pointed out that Mexico should take advantage of its strategic location in North America to regionalize supply chains, and identified some factors that make the country less competitive in foreign trade , such as a complex regulatory framework and poor infrastructure.
Morales pointed out that the automotive industry remains a pillar of Mexican exports, and with the relocation of production lines in Mexico ( nearshoring ) it can boost production and the shipment of units abroad.
He said that Mexico must be flexible and adapt to global changes and must promote and establish collaboration with other countries, because “ the future of foreign trade is very promising .”
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