The imposition of tariffs remains a controversial issue, especially amid the controversy between the U.S. and Mexico that arose during the Trump presidency. However, it seems that taxes are not suitable for the global workforce, particularly for the GM Corporation. The United States, Mexico, and Canada are part of the NAFTA system, which promotes duty-free trade. It is essential to adhere to the principles of free economic work and eliminate the imposition of tariffs.
Tariffs hurt the country that exports its products because the higher the border tax, the lower the workers’ wages, especially in Mexico. Thus, GM is responsible for its workers by advocating the elimination of the goods tax. A company like GM should take the same care of its employees in the U.S. and Mexico. Working conditions should be the same, and there is no question here of which workers are more important, in their country or host for the company (Ocampo Merlo, 2022). Any multinational company faces a choice: fewer workers with higher wages or more workers with lower wages.
There is no one-size-fits-all answer to this question because of the different economic situations in specific regions. It is essential for the Mexican economy that as many workers as possible are involved in the production process, even if their wages are minimal (Aggarwal, 2019). This factor will help the region avoid mass unemployment and maintain duty-free foreign trade. GM should focus on paying its employees in the U.S. and Mexico a decent wage. Otherwise, there will be worker strikes, as in 2019, because a Mexican worker gets $3.81 an hour, while a junior factory worker in the United States gets $17.5 an hour (Gurley, 2019). The organization should invest in a program to analyze the region’s economic situation and its operations there to decide on a wage hike.
Rates for border countries are not reasonable because of the lack of logistical problems that arise between the U.S. and European countries, for example. The absence of a tax would allow the demands of the global labor force, on which the quality of the products produced depends, to be met. A larger workforce would make production conveyorized and meet consumer demands promptly. Decent wages will increase the motivation of workers to make assembly-line quality products. GM should invest in its workforce and call for a customs duty waiver.
References
Aggarwal, A. (2019). SEZs and economic transformation: towards a developmental approach. Transnational Corporations Journal, 26(2), 1-21.
Gurley, L. K. (2019). General Motors fired five Mexican workers for aiding the U.S. auto strike. Vice. Web.
Ocampo Merlo, R. E. (2022). Mexican labour reform in motion: The case of General Motors-Silao. Tendencias, 23(1), 1-28.