The Commerce Department did not immediately comment.
The proposal would make software prohibitions effective in the 2027 model year. The hardware ban would take effect in the 2030 model year or January 2029.
They could but would not, because Mexico and the USA truly need each other, both know it, and so the statements on both sides are opening statements.
Mexico just had an election that consolidated the end of the old order kept alive by the two kleptocratic parties that dominated from the end of the Mexican civil war (over a century ago) down to the present. The new power arrangement, endorsed by a crushing victory, is that of the populist Morena Party, but under a still somewhat vague as to direction new leaership led by a not too will known female leader. Hmmm. And the USA is about to have a critical election.
Translation: Chinese automakers would have no need to build plants in Mexico, providing work for Mexicans and improving the Mexican economy.
Mexico, so far, does not provide a significant amount of leading edge technology for the products built in Mexico, so Mexico only sees a downside to banning Chinese technology. The US, however, has interests to protect, so wants the ban. So Mexico will have to be satisfied with the numbers of USian and European companies that are building plants in the country, providing work for Mexicans and improving the Mexican economy.
Steve, you should be hired by the Mexican Development and Trade Agencies, as you write far more clearly than do they!
A big ayup to your post.
I expect things will move fast after the USA election is clearly completed, either going totally off the rails or making that sweet sound of steel wheels loading down onto rails after going through a rough switch, making a nice reassuring ka-chunk. But you never know, as people are nuts especially about crooked money and nationalism.
Just for cheers I own a symbolic few shares of CPKC, which runs its main Mexican line just two miles from my home, headed from the Texas border towards the auto manufacturing centers of Celaya and Leon.
That line follows close to the historic “El Camino Real” that once carried silver and gold from the interior of Mexico to the Imperial Treasury of Spain.
Kansas City Southern reached into Mexico but stopped at Kansas City with an eastern branch to Springfield, IL. Merger with Canadian Pacific gives direct access to Chicago and Canada.
CPKC is potentially a major north south railroad. CN which got Illinois Central is a likely competitor. And Union Pacific which got Missouri Pacific and Southern Pacific (owner of the Cotton Belt Line) has to be a player.
It will be interesting to see how this works out. Shippers have more, stronger players to work with.
I would think there is a “mutual approval” agreement between the US and Mexico where vehicles legally drivable in Mexico are legally drivable in the US if the vehicle is brought for temperary personal use in the US while in the US and it will be returned to Mexico. It would be similar to the nationwide acceptance by all states of the validity of cars and insurance licensed/sold in other states.
fwiw, I drove over to the Henry Ford Museum, in Dearborn, MI, several years ago, and noticed a VW Vento, with Mexican plates, in the parking lot. I have seen a VW pickup, with Mexican plates near Kalamazoo. I would suspect that Mexican vehicles are a common sight on US roads near the border.
But, ChiCom product is coming in for particular scrutiny. A BYD might be stopped at the border.
If built in China, maybe. If built in Mexico, then there is a problem if it is stopped because it is (supposedly) legal to drive it in Mexico. If it is not legally driveable in Mexico, then the US can legitimately prevent it from coming into the US.
I have to say that I am disappointed in Mexico, though that may simply be due to a lack of information. A generation or two ago, Japan, China, Taiwan, and South Korea brought in tons of foreign investment with the attraction of cheap labor, but with the clear intent of learning the technology to be able to build the stuff themselves one day. That day has long arrived and we now have healthy respect for Asian competition.
I don’t see the same ambition with the Mexican governments that have come and gone. Mexico has two big bargaining chips, labor cheaper than China and NAFTA (or whatever it is called today). It should use those chips to build its own industries, IMO. It should as one example be subsidizing Mexican car companies that will get laughed at today but will evolve into the BYDs of tomorrow.
Perhaps that is the plan, though it is tough to find evidence for it. I fear that Mexico will settle for just being a manufacturing colony for foreign corporations.
I see no indication that Mexico has a passion to develop its own technology. It has always been chosen for low cost labor using foreign technology. Very unlike China or India which clearly put high value on education and technology.
It’s great to see Mexico’s democracy working and economy growing. Drug cartels and their violence remains a concern.
I just finished reading a book on Syntex. Founded in Mexico. For years birth control pills were made from wild yams in Mexico. Book tells of peasants who survived collecting those yams. Mexico did have technology to process those yams. And did develop education in chemistry. They lost control to foreign interests. And their chemical expertise might be contributing to illegal drug manufacture
Here is an example. USians seem to think they need to carry their gun everywhere. If they cross the border into Canada, with their gun, Canadian officials will not be happy.
Firearms are very strictly controlled in Canada, and any visitor bringing a gun into the country must declare it in writing at the border via a Non-Resident Firearm Declaration form. A $25 fee must also be paid at the Port of Entry (credit cards are accepted). Any illegal or undeclared weapons will be seized and never returned, and Americans crossing the Canadian border with a gun must have a “valid purpose” for importing the firearm.
