Fear and uncertainty are spreading rapidly among Chinese-owned businesses in Mexico following President-elect Donald Trump’s announcement of a 25% tariff on imports from the Latin American country.
In areas that once hosted Chinese delegations almost daily—such as the industrial parks in Monterrey, the northern manufacturing hub—new factories had begun sprouting up within months on land purchased by visitors. However, earlier this year, this trend started to slow.
This shift follows Trump’s election campaign promise to halt Chinese-backed factories in Mexico from sending duty-free cars to the U.S. by imposing a 100% tariff—a policy that has yet to be implemented.
“Most of them have switched to waiting and watching,” said an executive at a Chinese-funded factory in Monterrey, who requested anonymity. Speaking to the South China Morning Post, the executive added, “[Trump] talks a lot; it depends on how he does it.”
The wave of Chinese companies entering Mexico began during Trump’s trade war with China in his first term. High tariffs on Chinese goods benefitted Mexico, where products meeting certain rules of origin could enter the U.S. market tariff-free with much lower freight costs.
“If I were advising Chinese companies currently considering investing in Mexico, my advice—unlike what I did during the six years I was in China trying to bring investment to Mexico—would be to ‘stop and wait,’” said Jorge Guajardo, Mexico’s former ambassador to China and now a partner at DGA Group, a global business consulting firm.
“My thinking about Chinese companies in Mexico is that ‘Made by China’ is the new ‘Made in China,’” he added.
