Donald Trump has warned that if he wins the election, Chinese companies producing vehicles in Mexico will face 100 per cent tariffs to encourage the employment of American workers.
Speaking about Xi Jinping, the Chinese President, Trump stated that if in office, he would put a high tax on companies producing vehicles in Mexico which are then sold in the US.
The move looks to penalise Chinese companies looking to set up electric vehicle production sites in Mexico, including BYD.
This is not the first time Trump has threatened tariffs for Chinese suppliers after the former President said he would employ a 50 per cent tariff on Chinese cars and 60 per cent tariffs on Chinese goods, Bloomberg reported.
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While Trump was in power, the US Government imposed billions worth of tariffs on China
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Trump told Jinping: “Those big monster car manufacturing plants you are building in Mexico right now and you think you are going to get that not hire Americans and you’re going to sell the car to us, no.
“We are going to put a 100 per cent tariff on every car that comes across the lot.”
China and the US have a long history of increasing tariffs on imports with the Trump administration making bold moves.
According to the Tax Foundation, while Trump was in power, the US Government imposed over $200billion (£157billion) worth of tariffs on China.
In response to the high tariffs, China introduced taxes on more than $106billion (£83billion) worth of US goods, which prompted the US Government to reduce its levy, with China doing the same.
Controversially, while the US looks to limit China’s influence over car manufacturing, one car brand has called for the EU to not do the same thing.
Mercedes-Benz has called for tariffs on Chinese-made electric vehicles to be cut to spur on competition among major car brands.
The plea comes as the European Commission is considering introducing new tariffs and raising import duties to crack down on cheap EVs made in China which threaten the long-established auto market.
Ursula von der Leyen, President of the European Commission, warned of Chinese brands taking advantage of “illegal subsidisation” and whether this could lead to economic injury to EU producers.
Major Chinese brands have already started making moves into the European market, including BYD, NIO and Xpeng.
In a further boost to Mexican manufacturing, the UK recently extended its £300million trade arrangement with the Central American which was due to expire on January 1, 2024.
Under the new agreement, British manufacturers will have access to lower or zero tariffs when selling products to Mexico.
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The UK recently extended its £300million trade arrangement with Mexico
PAMike Hawes, SMMT chief executive, hailed the tariff extension, highlighting the importance of the UK-Mexico relationship to the motoring industry.
He said: “We welcome this pragmatic decision as it avoids duty liabilities from June 2024 which, given the long-standing and productive relationship between the UK and Mexican automotive industries, would have undermined our mutual trade."