Proposed U.S. tariffs on imported autos and auto parts, if implemented, would seriously harm Mexico's economy, a leading financial analyst said Wednesday.
"It would be a terrible blow for the Mexican economy in terms of job creation and foreign direct investment," said Gabriela Siller, the director of economic and financial analysis at Spanish bank Banco base.
It is estimated that the proposed 25 percent tariff would set back Mexico's light vehicle exports by 11.75 percent a year, Siller told a press conference on Mexico's economic outlook.
Each percentage point increase in the price of exports would represent a 0.47 percent decrease in the number of light vehicles shipped abroad, she said.
Overall, Mexico's auto and auto parts exports would plummet by as much as 13.25 percent a year if the tariff takes effect, she warned.
"The automobile sector accounts for a fourth of Mexico's total exports," said Siller. "In a trade war, there are no winners."
In May, U.S. President Donald Trump's administration launched an investigation to determine whether auto and truck imports represented a national security threat to the U.S. industry and the development of new technologies, in a bid to justify applying the tariffs under U.S. law.
Steep U.S. tariffs on steel and aluminum imports already took effect on June 1.
In June, U.S. Secretary of Commerce Wilbur Ross said the investigation would conclude at the end of July or beginning of August.
Mexico is the world's seventh-largest vehicles producer, with most of its production exported to the United States, its main trade partner.
Mexico, the United States and Canada are also renegotiating the North American Free Trade Agreement (NAFTA), with the White House wanting to change it and improve the terms for the United States.
