Mexico Dispatches Team to US Amidst Looming Tariffs on Copper and Pharmaceuticals
Mexico is preparing for high-stakes negotiations with the United States following threats of substantial tariffs on key exports, including copper and pharmaceutical products. President Claudia Sheinbaum announced on Friday that a delegation, led by Secretary of Economics Marcelo Ebrard and including representatives from the Finance and Foreign Relations Secretariats, will travel to the US to work towards a resolution.
The move comes after the US president signaled plans to impose a 50% tariff on copper imports and potentially up to 200% on pharmaceutical products. These proposed tariffs, framed as measures to protect the US economy and bolster domestic production, have raised concerns about their impact on global trade and Mexico’s economic stability.
G7 Discussions and a Multifaceted Approach
The upcoming talks build upon discussions held last month at the Summit of the Seven (G7) group in Canada, where President Sheinbaum and the US president addressed trade concerns. According to a senior official, the Mexican delegation will seek the “best possible negotiation” with the US, while simultaneously exploring alternative markets and bolstering national production.
“Our responsibility is to seek the best possible negotiation with the United States and, at the same time, look for other options for national production and export to other places,” the official stated.
The strategy extends beyond simply addressing the proposed tariffs. The discussions will encompass a broader range of issues, including security, border management, migration, and overall commerce.
Copper Exports and China’s Role
A key aspect of the negotiations will center on copper. While the US is a significant consumer of Mexican copper, China currently represents the largest export market. A substantial portion of the copper exported to China is later refined and re-exported to the US, highlighting the interconnectedness of the global supply chain.
“The two main countries of copper export are China, in the first place, we export more to China than the United States, much of this is scrap that is later refined in the United States because it requires it,” the official explained.
This dynamic underscores the potential disruption that tariffs could cause, not only for Mexico but also for US industries reliant on copper for the production of electric vehicles, military equipment, semiconductors, and various consumer goods.
Pharmaceutical Industry and Domestic Production
The potential tariffs on pharmaceutical products also pose a challenge. Mexico is actively working to develop its domestic pharmaceutical industry through the “Mexico Plan,” aiming to increase national production and expand exports to other markets.
“On pharmaceutical products, he recalled that the development of this industry is part of the Mexico Plan to manufacture medicines in national territory and export them to other markets,” a source confirmed.
A Global Trend of Protectionism
The Mexican government views the US’s trade policies as part of a broader global trend towards protectionism. The official emphasized that the situation facing Mexico is not unique, as many countries are grappling with similar challenges.
“The situation that Mexico is experiencing is not exclusive, is from the entire world, of a position that the United States government has taken in front of the rest of the countries to close its economy through rates,” the official said.
Despite the complexities, the Mexican delegation expressed a commitment to pursuing a favorable outcome. “Well, let’s make all the effort on our side,” the official replied when asked about the prospects for success. The tariffs are anticipated to take effect in late July or early August.
