US puts investments in electric cars in Mexico at risk

Investments in Mexico are at risk from a US bill that offers tax credits for electric vehicles built with national labor, Economy Secretary Tatiana Clouthier said in an interview.

At least two investments in electric vehicles could not be closed in Mexico and eight states could lose the expansions of automakers due to the legislation, he said Clouthier via Zoom.

He noted that he is in conversation with many US senators to try to change their minds and described the US actions as contradictory at a time when it is working closely with Mexico to improve bottlenecks in the supply chain and friendly negotiations are taking place. on issues like immigration.

“It cannot be that we are working so harmoniously in some areas with the United States when, at the same time, the senators do this issue.“, said Clouthier. “There are impacts in terms of investments stopped in some states by electric cars that are yet to come”.

So much Mexico such as Canada have accused the United States of possible violations of the updated North American free trade agreement, known as the T-MEC. They argue that the bill, which would give an additional tax credit to consumers who buy electric vehicles made by unionized American workers, would hurt automakers in the rest of North America.

Clouthier said earlier this week that his country was willing to go ahead with “all kinds of retaliation“, Including the imposition of tariffs on US products. The Minister of Commerce of Canada, Mary Ng, warned that the proposed legislation puts hundreds of thousands of jobs at risk.

The dispute over the credit for electric vehicles has added to already existing tensions over which cars can be sold tax-free based on the percentage of parts that are made in the region. Mexico requested formal talks on the issue in August and Canada joined as an interested third party.

In the interview, Clouthier said that USA can expect a “Christmas gift”Or a gift during the feast of the Magi at the beginning of January, that is, when Mexico he plans to go formally to an arbitration panel. He held that Canada it could join Mexico or act as a third party to the disagreement.

Clouthier said, without giving details, that President Andrés Manuel López Obrador will announce a significant private investment in Mexico on Monday.

He also said that Mexico is about to announce some other major investments in the border states as the companies look to move their operations from Asia to North America to avoid supply shortages and comply with T-MEC local content rules. The companies are buying real estate in the northern states as they prepare to move their operations to Mexico in the process called “nearshoring“, said.