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Mexico will 'immediately' respond to U.S. border tax

Staff Writer |
Mexico must be ready to respond immediately with its own tax measures if the incoming administration of President-elect Donald Trump imposes a border tax, the economy minister said.

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Trump has promised a "major border tax" on companies that shift jobs outside the United States, and such a measure could hobble Mexico's exports to its top trading partner.

"It is clear we need to be prepared to immediately neutralize the impact of such a measure," Economy Minister Ildefonso Guajardo said in an interview on Mexican television.

"And it is very clear how - take a fiscal action that clearly neutralizes it," he said.

Guajardo said Trump's proposed tax "was a problem for the entire world" and that it "would have a wave of impacts that could take us into a global recession."

The minister said he expected foreign direct investment in Mexico this year to total around $25 billion, with investment in the energy and telecommunications sectors expected to more than make up for the loss of a planned $1.6 billion Ford Motor factory that the company said this month it is cancelling.

Guajardo also praised the government of Japan and Toyota Motor for their "reasonable" response to Trump's threat to impose a significant border tax if the company does not stop making its Corolla model in Mexico for the U.S. market.

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