Concerns grow in Mexico over Trump’s trade policy

Global Business

Concerns grow in Mexico over Trump's trade policy

The United States and Mexico do about half-a-trillion dollars of trade every year. But Donald Trump has called North American Free Trade Agreement, or, NAFTA, the “worst deal ever,” and said he plans to renegotiate.

CGTN’s Franc Contreras reports on the reaction by the Mexican government.

Concerns grow in Mexico over Trump's trade policy

Concerns grow in Mexico over Trump's trade policy

The United States and Mexico do about half-a-trillion dollars of trade every year. But Donald Trump has called North American Free Trade Agreement, or, NAFTA, the "worst deal ever," and said he plans to renegotiate. CGTN's Franc Contreras reports on the reaction by the Mexican government.
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Many Mexicans fear that could potentially launch a trade war.

But companies doing business in Mexico are taking a longer-term point-of-view.

High-tech televisions made in Mexico are for U.S. and Mexican consumers.

The Chinese-owned Hisense company’s largest factory outside of China was purchased in 2016 for $24 million.

CEO David Gold says NAFTA allows his company to assemble and export its products more efficiently, and Hisense has become a major player in the sale of consumer electronics in the United States.

Under NAFTA, annual trade between Mexico and the United States has surpassed half a trillion dollars.

However, Donald Trump has argued that NAFTA benefits Mexico and costs U.S. jobs. He has threatened to slap what he calls “border taxes” on automakers which build vehicles in Mexico.

General Motors has announced it will shift some of its production from Mexico to the United States. Several GM officials maintain the decision has nothing to do with Trump’s comments.

In addition, Ford has cancelled plans to build a one-and-a-half billion dollar factory in Mexico, opting instead to build electrified vehicles in Michigan.

Ford says it would have taken this decision not to open a new factory in Mexico even if Trump had lost the U.S. presidential election.

Investment consultant Luis de la Calle is a long-standing defender of the North American Free Trade Agreement. He has an original NAFTA document on the wall of his office. De la calle said Trump underestimates the role played by the agreement.

NAFTA does have some opponents in Mexico, who say it enriches major companies and hurts poor working Mexicans. But officials at Hisense said its long-term investments are designed to outlast moments of political uncertainty.

For now, Mexican companies want to make sure that under NAFTA, goods and services will continue to flow between the U.S. and Mexico.