Mexico must be ready to respond immediately with its own tax measures if the incoming administration of President-elect Donald Trump imposes a border tax, the country’s economy minister said on Friday.
Trump, who takes office on Jan. 20, on Wednesday promised a “major border tax” on companies that shift jobs outside the United States, and such a measure could hobble Mexico‘s exports to its top trading partner.
“It is clear we need to be prepared to immediately neutralize the impact of such a measure,” Economy Secretary Ildefonso Guajardo said in an interview on Mexican television.
“And it is very clear how — take a fiscal action that clearly neutralizes it,” he said.
Guajardo said Trump’s proposed tax “was a problem for the entire world” and that it “would have a wave of impacts that could take us into a global recession.”
He has warned that U.S. corporate tax cuts proposed by Trump, as well as the border tax, could undermine foreign investment in Latin America’s No. 2 economy.
Mexico slapped a tax on U.S. high fructose corn syrup in the early 2000s after the United States refused to allow free trade in Mexican sugar.