The impact of the new protectionist stance in US trade policy on selected German companies in Mexico

ABSTRACT

Previous studies on the impact of the new protectionist stance of the United States have focused mainly on the imposition of the controversial border tax. This research advances the understanding of the possible impacts of the tightening of the rules of origin and the imposition of the most-favored nation tariffs on manufacturing companies. The findings show a negative impact from the protectionist measures on businesses by increasing costs per unit and decreasing the gross margin. The results suggest that those additional costs could be passed on to the final buyers, raising the price level by more than previously assumed.