Mexico tariff hike will not impact Taiwan's chips: Trade office

Taipei, Dec. 23 (CNA) A tariff hike to be imposed by the Mexican government will not affect Taiwan-made information and communication technology (ICT) related items such as semiconductors, Taiwan's Office of Trade Negotiations said Tuesday.

According to the office, these items, including chips, servers, graphics cards and printed circuit boards (PCBs), represent about 70 percent of Taiwan's exports to Mexico, so the tariff hike is expected to have limited impact on Taiwanese exporters.

Earlier this month, the Mexican parliament passed a proposal by its government to raise tariffs on more than 1,400 products by 5 percent to 45 percent from countries which do not sign a free trade agreement with Mexico, in a bid to bolster the country's manufacturing sector and improve its job market.

Taiwan has no FTA with Mexico and will be subject to the new tariffs, scheduled to come into effect on Jan. 1, 2026.

The office said since September, when the Mexican government proposed the tariff hike, Taiwan had expressed its concerns about the new levies and held discussions on the matter with the Mexican authorities through bilateral and multilateral channels.

During the talks, Taiwan's representative office presented Mexico with a list of 105 Taiwanese export items for which it sought preferential status, with Taiwanese exporters concerned over the potential impact of the tariff hike.

It was agreed that 82 products among the 105 listed will be levied at either the current tariff or a lower tariff, which is expected to stabilize Taiwan's outbound sales to Mexico, according to the office.

Of the 82 products, 27 will be levied at the current tariff, including 21 select auto part products, such as rearview mirrors, three plastics products, and three steel products, while the remaining 55 items will see their tariffs cut, including other auto parts such as gear boxes, chemical fiber, resin, polyvinyl chloride (PVC), artificial skin, cardboard, labels, cosmetics and motorcycles, the office said.

The office's announcement echoed Minister of Economic Affairs Kung Ming-hsin (龔明鑫), who said last week that if Mexico were to impose taxes on Taiwan's ICT products, the levy would affect the Latin American country's server supply chain and not be in its own interest.

According to Kung, Taiwan's ICT products remain protected by the World Trade Organization's Information Technology Agreement (ITA), which has eliminated all import duties on a wide range of information technology products.

In the first 11 months of this year Taiwan's exports to Mexico totaled US$7.33 million, up 187.28 percent from a year earlier, with US$4.75 billion recorded for all of 2024.