Biden Quietly Urges Mexico to Pounce on US Shift From Asia Chips

President Joe Biden privately urged his Mexican counterpart to enact new policies to capitalize on the US drive to boost domestic semiconductor production, part of a push to shift supply of some key technology components from Asia to North America.

(Bloomberg) — President Joe Biden privately urged his Mexican counterpart to enact new policies to capitalize on the US drive to boost domestic semiconductor production, part of a push to shift supply of some key technology components from Asia to North America.

Biden’s advice accompanied an agreement Tuesday with Mexico and Canada to better coordinate investment in semiconductor manufacturing across the continent, including identifying chip investment opportunities and critical mineral resources and supporting education in advanced technologies.

Biden met with Andres Manuel López Obrador on Monday in Mexico City, where the two agreed to set up high-level teams to spur economic cooperation on chips and other measures, officials familiar with the session said. They asked not to be identified because the conversation was mostly private. 

The teams are still taking shape, but US Commerce Secretary Gina Raimondo, who participated in the meeting with AMLO, will be heavily involved, according to the officials.

Biden is in Mexico for meetings with AMLO and Canadian Prime Minister Justin Trudeau — a gathering called the North American Leaders summit, or more informally the “three amigos” summit. Trade, economic cooperation and migration issues lead the agenda. 

“We’re in the process at home — and you are as well, we talked about it — of strengthening our supply chains, so that no one can arbitrarily hold us up or a pandemic in Asia can cause us to not have access to critical elements that we need to do everything from build automobiles to so many other things,” Biden told Trudeau in a meeting on Tuesday. 

Trudeau agreed that the countries need to “continue to move forward to create those efficient and resilient supply and value chains that we need,” and said he’s pleased with the Biden administration’s cooperation on the issue so far.

Washington has ramped up efforts to expand semiconductor production after supply chain disruptions caused by the Covid-19 pandemic and rising tensions with China highlighted global dependence on production in Asia, particularly Taiwan. That drive includes more than $50 billion in incentives from a US law Biden signed last year to build new factories in the US, as well as a related push to stifle China’s ambitions to develop its own advanced chips industry.

Raimondo, whose department is leading the implementation of chips spending, said on a visit to Mexico City in September that Mexico can benefit both from the manufacturing facilities for semiconductors and also from testing, packaging and assembly of chips. The CHIPS Act, which the US Congress passed last year, will create jobs and opportunities for the US and its southern neighbor, she said.

Earlier: US Enlists Mexico to Find Incentives to Attract Chipmakers

The US, Canada and Mexico announced Tuesday that their efforts to coordinate investment in semiconductor manufacturing will include establishing a forum with industry representatives to support the growth of the semiconductor sector, according to a White House statement. 

The nations are also committing to reduce methane emissions by at least 15% by 2030, specifically from the waste sector.

A senior Mexican Foreign Ministry official said last week that López Obrador would ask Biden in Mexico City for support attracting semiconductor investment. 

López Obrador’s administration wants the US to jointly approach companies that are looking to relocate to North America with the suggestion that a new factory built in a state like Arizona could by supplied with some parts and processes developed in Mexico, the person said.

Read more: AMLO to Ask Biden for Energy, Semiconductor Support at Summit

Mexico also wants US help to secure funding from development banks for an ambitious plan to build several state-owned solar parks in the border state of Sonora, said the official, who asked not to be identified while discussing plans that aren’t public. López Obrador will also look to discuss selling Mexican clean energy north of the border, especially in California, the person said.

–With assistance from Max de Haldevang, Eric Martin and Jennifer Jacobs.

(Updates with Biden and Trudeau remarks beginning in sixth paragraph)

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