Mexico is considering tax credits to attract foreign firms to invest and produce domestically, targeted at electric vehicle (EV), semiconductor, rare earth minerals, battery, and electronics sectors, a top Mexican trade official said in an interview.
(REUTERS).- The comments come as Mexico’s new government assesses how to spark more investment as companies look to move supply chains closer to their main market, while simultaneously navigating a turbulent and more protectionist period in the U.S. ahead of presidential elections.
“We are seriously analyzing creating tax credit incentive programs very similar to those in the United States and Canada … and we believe that would allow us to attract many companies to Mexico,” Deputy Foreign Trade Minister Luis Rosendo Gutierrez told Reuters on Friday.
Gutierrez said the incentives would apply to companies from any country interested in investing in Mexico, including China.
Mexico would not be a “springboard” for China to enter the United States, he underscored.
An internal government document seen by Reuters said Mexico had started working with companies such as Taiwanese electronics manufacturer Foxconn, chipmaker Intel, U.S. automaker General Motors, logistics firm DHL, and carmaker Stellantis, to identify products that can be manufactured in Mexico instead of being imported from Asia.
According to the document, Mexico is looking to replace imports from China, Malaysia, Vietnam, and Taiwan.
Gutierrez declined to give further details on the firms named in the document.
The approach towards Chinese auto-makers marks a possible shift from the previous government of former President Andres Manuel Lopez Obrador, with Reuters reporting in April that officials had said they would not give local incentives such as low-cost public land or tax cuts to Chinese automakers due to pressure from the United States.
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