Mexican President mocked the Biden administration’s warning about tariffs

According to The Wall Street Journal, Mexican President Andrés Manuel López Obrador mockingly disregarded the Biden administration’s recent warnings to take moves that could result in tariffs being levied on Mexican exports on Wednesday.

When asked about potential U.S. enforcement actions for procedures that allegedly benefit Mexico’s national energy corporations, CFE and Pemex, Obrador sarcastically said, “Ooooh, I’m so scared,” according to the Wall Street Journal.

The United States has requested dispute settlement consultations with Mexico under the United States-Mexico-Canada Agreement (USMCA), which could result in penalties being placed on some Mexican exports if the two sides are unable to reach an agreement.

Background

Obrador made the remarks on the same day that Katherine Tai, the United States Trade Representative, made the announcement.

Mexico is the second-largest trading partner of the United States after Canada, but, according to the WSJ, relations between Obrador and President Joe Biden have deteriorated recently over issues including trade policy, energy, and the extradition of WikiLeaks founder Julian Assange.

Obrador has worked to give CFE and Pemex preferential treatment since taking office in 2018, according to The New York Times, in an effort to increase the nation’s energy production independence.

However, according to the NYT, U.S. officials and energy firms assert that Mexico is favoring its state-owned energy companies in contravention of the USMCA when it comes to issues like price, emissions requirements, and contract conditions.

“Mexico’s energy policies adversely impact U.S. companies that want to invest and grow in Mexico, and are inconsistent with Mexico’s commitments under the USMCA.

More information

They also roll back the reforms Mexico previously made to meet its climate and environmental goals under the Paris Agreement,” a spokesperson for the Office of the US Trade Representative told the Daily Caller News Foundation.

The WSJ said that the US and Mexico now have thirty days to start negotiations under the dispute settlement provisions of the USMCA. If those fail to resolve the issue, the United States may ask a group of experts to mediate it and then apply duties on Mexican products to make up for the harm done to American businesses, according to the WSJ.

“Canada has consistently raised its concerns regarding Mexico’s change in energy policy. We agree with the United States that these policies are inconsistent with Mexico’s…obligations,” a Canadian government spokeswoman told the WSJ.

In a statement released on Wednesday, the Mexican Economic Ministry was less mocking than Obrador, saying that “the government of Mexico expresses its readiness to negotiate a mutually suitable settlement throughout the consultation process.”

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