(Adds minister comment on Trump, Toyota, investment figure)
MEXICO CITY Jan 13 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 on Friday, warning such
protectionism may trigger a global recession.
Trump, who takes office on Jan. 20, 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.
Trump has repeatedly attacked Mexico over trade, jobs and
immigration since he first launched his run for the White House
in 2015, driving the peso currency to historic lows and
unnerving investors, especially in the auto sector.
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."
Nonetheless, 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 Co. factory that the company said this month it is
cancelling. Trump had strongly criticized the plan, but Ford
said its decision was not the result of pressure from Trump.
Guajardo also praised the government of Japan and Toyota
Motor Corp 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.
Toyota said last week the automaker has no immediate plans to
curb production in Mexico.
"Toyota has 10 plants in the United States... and employs
more than 130,000 Americans. If I were Mr. Trump, I'd treat them
with more respect," Guajardo said.
He added that he expects total foreign direct investment
during the six-year term of President Enrique Pena Nieto, which
ends in late 2018, to average $30 billion annually.
Guajardo has previously warned that U.S. corporate tax cuts
proposed by Trump, as well as the border tax, could undermine
foreign investment in Latin America's No. 2 economy.
Mexico slapped a tax on U.S. high fructose corn syrup in the
early 2000s after the United States refused to allow free trade
in Mexican sugar.
(Reporting by Michael O'Boyle; Editing by Frances Kerry)