The automotive industry located in Mexico during the presidency of Donald Trump

Publication Type:

Conference Paper


Gerpisa colloquium, Paris (2017)


We begin with the hypothesis that Trump’s declarations regarding the NAFTA renegotiation, as well as a raise on Mexican export taxes to the United States in the automotive industry, are mere expressions of a professional extortionist, just as Luis de la Calle asserts, and therefore, they must be taken into consideration under said perspective. This hypothesis and the perspective to which we are referring, are sustained by the fact that D. Trump’s personal history — outlined through solid investigations made in the Financial Times — depicts a businessman known to be unsuccessful in business, and who’s been involved, side to side with the Russian mafia, in money laundering activities while participating in various businesses. In fact, he was involved in recent years in two different businesses in Mexico where lawsuits for breach of contract took place: the Miss Universe Pageant in Cancun, and Trump’s condominiums in Ensenada, Baja California. It has been published that Trump lost both.
Trump knows, because it is widely recognized, that several members of the Executive, Legislative and Judicial powers in Mexico, headed by president Enrique Peña Nieto, are involved in public fraud incidents in which they are accused of procuring personal benefit, misappropriation of public funds, involvement with major drug traffickers, as well as incidents regarding repression of the population which resulted in several deaths. With this knowledge, he uses the facts referred to, in order to boast before the citizens who elected him, about extreme harshness and offenses towards the Mexican people. Peña Nieto and those in charge of negotiating with Trump take a position of weakness in order to avoid further threats, since they fear that the USA government will thwart their plans for personal advantage regarding the 2013 Energy Reform; these exist since the times of Salinist reforms, which increased with the NAFTA. Regarding the automotive industry, the NAFTA brings great advantages to the north American companies, and those of the countries where cars and autoparts are manufactured; benefits in Mexico are limited to high salaries if we compare them to the misery that exists in the country, but still much lower than those paid in the countries that own the companies located in Mexico. Politicians in the country are personally benefitted with the agreement, since both parties (Americans and Mexicans) know that the USA government guarantees them impunity in case problems arise with the Mexican Law. The recent case of César Duarte, ex-governor of the state of Chihuahua, among many others, represents this situation well. Trump, on the other hand, threatens to send American troops to Mexico in order to “combat drug trafficking”.
The advantages that American, Japanese and German car assembly plants and autoparts manufacturers have in Mexico, they wouldn’t have in the United States, or in Japan, or in Germany: neither the salaries nor the taxes they pay, nor the trade-union control of workers. Automotive companies are in the country because it’s convenient to them. Trump cannot offer a fifth of what assembly plants or autoparts manufacturers can obtain in Mexico. The foreign automotive industry located in Mexico has a little over 80 thousand employees at the assembly plants and 700 thousand at the autoparts manufacturers; 30% of the former are American — Fiat Chrysler, which has 15% of total production in Mexico, is now Italian. Similarly, autoparts manufacturers have as diverse nationalities as the assembly plants, where the German, Japanese and American predominate. Lastly, the World Trade Organization agreements (which would replace the NAFTA in the event of cancellation) regarding the automotive industry, give the countries tariffs that are near zero, so it would be extremely difficult to accomplish what Trump has proclaimed, I insist, with another intention.
It has been speculated, based in solid information, that neither president Trump nor Peña Nieto are interested in “Making America Great Again”, nor are they interested in their own workers, but rather in their own personal interests.



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