{"text":[[{"start":9.25,"text":"Donald Trump’s auto tariffs on Mexico are “unsustainable”, and US carmakers are ultimately losing out too, the head of Mexico’s auto association has warned."}],[{"start":22.65,"text":"Mexico was mostly relieved on Thursday when Trump announced that goods exported under the US, Mexico, Canada trade deal (USMCA) would remain tariff-free for 90 days while talks continue."}],[{"start":38.58,"text":"Finished autos will still incur a 25 per cent tariff under separate measures put in place by Trump. That arrangement was paralysing investment decisions, said Rogelio Garza, president of the Mexican Auto Industry Association."}],[{"start":56.08,"text":"The industry is pushing for a separate bridge deal ahead of the USMCA review next year, he said, as growth in production and exports stagnate."}],[{"start":68.62,"text":"“This isn’t sustainable . . . it’s not sustainable for the American companies,” Garza said. “It would be disastrous to be this way from now until next year.”"}],[{"start":80.01,"text":"In March, Trump imposed 25 per cent tariffs on automotives."}],[{"start":85.60000000000001,"text":"He has since reduced that rate to 15 per cent in a deal with major auto exporter Japan while the EU is waiting for an US executive order to announce the same rate."}],[{"start":99.39000000000001,"text":"Mexico has no such deal yet, hampering the auto sector despite its deep integration with the US, with parts often crossing the border multiple times."}],[{"start":111.93,"text":"Garza said this put not only the Mexican auto industry at a disadvantage but the American and Canadian sectors as well: “The US companies here say, wait a minute, now I’m worse off than Japan.”"}],[{"start":128.91,"text":"Mexican auto exporters that comply with USMCA can claim a discount on the tariff for US content — which is higher than in other nations at an average of about 40 per cent."}],[{"start":143.96,"text":"That would theoretically mean Mexican-made cars pay an average of about 15 per cent in total, the same level as Japan and the EU under their deals."}],[{"start":155.95000000000002,"text":"In reality, Garza said just two or three models made in Mexico had qualified for the discount so far. Everyone was still paying the 25 per cent rate, and no one had seen their money back yet, he added."}],[{"start":171.13000000000002,"text":"“The process to apply for the exemptions is too complicated,” he said. “They are in the process of getting refunded, but it’s just 2 or 3 models of 50, 60.”"}],[{"start":184.48000000000002,"text":"Trump targeted Mexico and Canada within hours of taking office in January, accusing them of not controlling their borders and allowing migrants and fentanyl into the US."}],[{"start":198.27,"text":"He slapped a 25 per cent tariff on goods, but the vast majority of exports are still passing tariff-free under USMCA."}],[{"start":209.22,"text":"The auto sector tariffs are separate and would require their own deal to change the terms. Mexican President Claudia Sheinbaum last week announced a 90-day extension for bilateral talks had been agreed, and that officials were working for a deal on autos."}],[{"start":226.72,"text":"Mexico’s auto industry was supercharged by the signing of the North American Free Trade Agreement (Nafta) in the 1990s and became an economic engine employing more than 1 million people. It is now the world’s fifth-largest, leapfrogging Germany and South Korea last year."}],[{"start":247.96,"text":"The sector has now flatlined amid the tariff uncertainty and sharp government budget cuts, mirroring the broader economy. In the first half of the year, total production was flat at 2 million vehicles, while exports rose 2.8 per cent to 1.7 million, according to government data."}],[{"start":269.51,"text":"Automakers such as General Motors and Stellantis, which both have several factories in Mexico, have taken a hit on their profits this year due to the tariffs. Companies appeared to be absorbing most of the additional costs, Garza said, but expected prices in the US to rise soon."}],[{"start":289.99,"text":"Nissan said last week it would close a Mexico plant it opened in the 1960s — its first outside Japan — and move production to its other factories in the country. GM said it would move some production of the Chevrolet Blazer and Equinox models from Mexico to the US."}],[{"start":312.43,"text":"Garza, a former deputy economy minister, said companies could shift production of certain models where they have capacity, but that Mexico was still a better place for a factory given the much higher costs in the US."}],[{"start":327.92,"text":"“It's not easy, the cost of going there . . . a company does its Excel [calculations] and even with 15 per cent we are competitive.”"}],[{"start":338,"text":"Several German carmakers in Mexico are having an even tougher time because they source more parts from Europe and do not comply with USMCA. They pay an extra 2.5 per cent duty on top of the 25 per cent."}],[{"start":356.55,"text":"Garza said he thought that the US deal with the EU deal showed that the environment was very challenging. Whoever comes after Trump may not be that different, he said, with protectionism now the norm."}],[{"start":373.19,"text":"“Who is going to come in and say, ‘oh yes let me take away the 15 per cent on the European Union’ — they’ll be lynched,” he said."}],[{"start":381.96999999999997,"text":"Garza — and the Mexican government — are now focused on trying to strike a more favourable deal than everyone else."}],[{"start":390.02,"text":"“We’re neighbours, we’ve had a deal for 30 years, we’ve both benefited,” he said of the US. “You know you need me, and I know I need you. Give me a better deal.”"}],[{"start":412.59,"text":""}]],"url":"https://audio.ftmailbox.cn/album/a_1754269394_2710.mp3"}