Mexico is an economic player in the US elections | Article by David Ordaz

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David Ordaz

The wait is over. It’s November 5th USA go to the polls to choose your new one president. There are millions of people who are called to go out and vote for election next presidentwhich add to the nearly 75 million who have already voted early.

Upon completion of their campaigns, both Kamala Harris How Donald Trump They spent their final day with emotions running high, traveling and touring the most contested states, trying to persuade undecided voters and reinforce the message with their bases, and thereby determine direction of elections.

Kamala Harris He spent his last day of campaigning in Pennsylvaniawith rallies in Allentown, Pittsburgh and Philadelphia, while trump He didn’t waste a second and went to three battle states, including North Carolina, Pennsylvania and Michigan. The Republican held his last event in Grand RapidsMichigan, as in the two previous cases.

Already from opening boxes In almost all electoral districts, both candidates arrive technical tie. According to the latest Washington Post poll, Harris leads in 4 of 7 key states by two points, and New York Times and Siena College They also said Harris leads in four states, tied in Pennsylvania and Michigan. On the other hand, FiveThirtyEight reported a one-point Democratic lead, while Wall Street Journal He reported that the Republican was ahead of his opponent by two points.

In this context, during one of his campaign closeouts, Trump issued a last-minute letter in which he clearly spoke to his Republican and radical supporters, saying that if elected president, he would immediately I would warn you to the President of Mexico, Claudia Sheinbaumwhich should stop the flow of migrants And drug cartels to the United States, or Mexican exports would be subject to a 25 percent tariff, even increasing by 50, 75, or even 100 percent if not met.

“If they don’t stop this onslaught criminals And drugs whoever comes to our country, I will immediately impose rate 25% on everything they send to the United States,” Trump told supporters in Raleigh.

Clearly, the threat is significant as it will impact exports, formal job creation, foreign direct investment and economic growth. This will even lead to a possible decrease in the company’s credit rating. Mexico sovereign debt.

Moreover, the exchange rate is likely to rise to new levels. all time record highs. Anything more catastrophic would be tantamount to repealing the Mexico-United States-Canada (T-MEC) Treaty.

As a party to this important trade agreement, Mexico benefits from the elimination duty export when selling products to the USA today, thanks to coastal installationOur country has strengthened its economic role, establishing itself as a major trading partner USA.

By text T-MEKIn order for exported products to qualify for tariff waivers or waivers, they must meet certain content requirements that determine what percentage of the value must be produced in signatory countries. And although the increase in activity caused by moving has not changed trade tariff rules for exports to the US, foreign companies that move their production to Mexico may receive significant benefits, such as reduced or cancellation of tariffs.

A study conducted by scientists from World BankHe International Monetary Fund And University of Californiashows that Chinese exports to the US declined between 2017 and 2022, but the trade distance between both countries is not as deep as it seems.

“The results show that denouement real, but supply chain “They remain intertwined with China,” argued an analysis presented at a conference on global geo-economic fragmentation organized by the IMF last May.

This study explains that Chinese companies They have found different ways to indirectly avoid tariffs imposed by the United States in order to continue exporting to the world’s leading economy, and now they are doing it through Mexico.

In other words, more and more Chinese firms are opening factories in other countries from where they can export their products to other countries. US market without having to pay duties, since, strictly speaking, it is not a product from China. And in other cases, countries like Mexico buy from suppliers The Chinese require many parts to manufacture their products and then assemble the final product in their countries.

One of the benefits of Mexico having a trade agreement is that “assemblyor the production of the final product is regulated by contract, that is, the product must be “Made in Mexico” must have a certain percentage of local added value, benefiting the Mexican economy and not allowing it to be considered a transit country.

It should be noted that in 2023 Mexico This ended China’s 16-year dominance as the largest exporter to the US. According to data from INEGIour country has regained this place with export value 418.3 billion dollars, but we have competitors who also want to take the place that China leaves it open. Countries such as India, Vietnam, Poland or Indonesia also see and want to seize opportunities in the midst of commercial and geopolitical conflict between the Chinese and the Americans.

At the same time, the declarative threat Donald Trump The issue of tariffs is no longer just rhetoric and could be decisive for the millions of Mexicans who will be able to go out and vote today.