China-Mexico car cooperation shouldn’t be easily disrupted by US restrictions: chamber

The car industry and supply chain between China and Mexico has been strong, and such cooperation should not be easily disrupted by US restrictions, Victor Cadena, executive vice president of the Mexican Chamber for Commerce in China, told the Global Times in an exclusive interview on Tuesday.

The remarks were made in response to the US administration's recent proposal to ban key Chinese software and hardware in connected vehicles from American roads over so-called national security concerns. Such a move has raised concerns from the Mexican government over its potential impact on the country's car industry.

In a filing with the US Department of Commerce Department, Mexico's economy ministry said on Monday that the proposal could have a "substantial impact" on Mexico's automotive industry.

"Economically, it poses potential trade barriers, disruptions to supply chains, increased production costs, and a possible risk of reduced direct and indirect employment," it said, according to media reports.

The latest response from the Mexican side again reflects concerns over unilateral US protectionist moves raised among the international community, including its neighboring country, Wang Youming, director of the Institute of Developing Countries at the China Institute of International Studies in Beijing, told the Global Times on Tuesday.

Wang said that the proposal from the US is a politically motivated one targeting China, which is providing cost-effective and competitive products to countries worldwide including Mexico, an important part of the global supply chain.

As some Chinese carmakers have set up operations in Mexico, they are sparking a surge in local investment and job creation, the Chinese expert said.

"Automotive manufacturing is a key industry in Mexico... more than 20 Chinese auto parts companies already operate in Mexico and several Chinese carmakers such as Chang'an and BYD have announced plans to set up plants in Mexico," Cadena said.

In addition to large vehicle manufacturers, dozens of Chinese auto parts companies have set up factories in Mexico over the past decade, according to the chamber.

Although there are uncertainties, Cadena said he has seen that economic and trade exchanges between the two countries have not been hindered.

Mexico is China's second-largest trading partner in Latin America, and China is Mexico's second-largest trading partner in the world.

The Mexican Ministry of Economy recorded 378 foreign direct investment announcements in 2023, worth $110.7 billion. China ranked second with $13.2 billion, second to the US with $42.1 billion, the Xinhua News Agency reported.

Given the context, Cadena said that car industry cooperation between China and Mexico has remained strong, and it should not be easily disrupted by any US restrictions.