Mexico's tariff hike plan to have limited impact on Korean exports: ministry

The Ministry of Trade, Industry and Resources holds a meeting with officials from Korean automobile, auto parts and steel companies on Mexico's tariff hike plan in Seoul, Friday. Courtesy of the trade ministry

Mexico's tariff hike plan will likely have a limited impact on Korean exports thanks to the country's tariff reduction programs for intermediate goods imports, the industry ministry said Friday.

The ministry offered such an assessment during an emergency meeting with Korean automobile, auto parts and steel companies, held a day after Mexico's Senate approved tariff hikes from next year on imports of automobiles, auto parts, textiles, steel and other goods from countries that do not have a free trade agreement with the country, including Korea.

Under the plan, Mexico plans to impose 25 percent tariffs on imported auto parts, 25-30 percent tariffs on washing machines, 25 percent duties on refrigerators and 30 percent duties on microwaves.

The ministry said the tariff rates have been reduced from initially proposed rates, partly thanks to Korea's efforts to address concerns over such measures through various channels, including meetings between the countries' trade and foreign ministers.

The ministry also insisted the planned tariff hikes will have only a limited impact on Korea's exports since Mexico has tariff reduction programs for imports of intermediate goods, Seoul's key export items for the Latin American country.

Mexico has served as a major manufacturing hub for Korean automobile and home appliances companies. Korean companies there have imported intermediate goods from their home country to produce finished goods in Mexico for exports to North America under the free trade pact among the United States, Mexico and Canada.

The ministry said it will closely monitor the impact of Mexico's tariff plan on Korean companies and work to minimize damage on domestic industries.