Mexico plans 50% tariffs on cars from China amid US pressure
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A BYD dealership in Mexico City. Mexico is looking to raise tariffs on cars made in China to as much as 50 per cent.
PHOTO: BLOOMBERG
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MEXICO CITY – Mexico, under pressure not to serve as a back door for Chinese goods entering the US, has proposed a 50 per cent tariff on car imports from China – up from 15 per cent to 20 per cent.
The initiative, contained in a Bill submitted by the Mexican government to Congress, seeks to assuage US President Donald Trump – who has repeatedly urged trading partners to increase duties on China – while also bolstering Mexico’s industrial sector.
The White House has said Chinese producers are abusing a free trade deal between the US, Mexico and Canada to send goods northward over the Mexican border tariff-free.
Mexican President Claudia Sheinbaum has also complained of the impact of Chinese imports on domestic manufacturing, and the Bill says the increased tariff will seek to protect 19 industrial sectors considered “strategic”.
It also proposes raising tariffs on other countries with which Mexico has no trade agreement.
Mexico replaced China in 2023 as the US’ largest trading partner, with the Latin American country’s northern neighbour buying more than 80 per cent of its exports.
It sends nearly three million automobiles to the US a year, including cars and trucks assembled by US auto companies in Mexico.
If the Bill is approved, light vehicle imports from China will be subject to a 50 per cent tariff, and auto parts between 10 per cent and 50 per cent.
The Bill, announced by the Economy Ministry on Sept 10, said the changes sought to “protect the national industry in strategic sectors, replace imports from Asia with domestic production” and “improve Mexico’s trade balance”.
The initiative should protect 325,000 jobs in strategic industries and create thousands more, said the ministry.
Two out of every 10 light vehicles sold in Mexico are Chinese, according to official data. Sales in the sector grew by 10 per cent in 2024.
Several auto giants, including American General Motors and Ford, German Volkswagen and Japanese Nissan, Honda, and Toyota, have factories in Mexico.
The list of tariffs is included in a draft Bill sent to Congress on roughly 1,400 products that will apply to all countries with which Mexico does not have a trade deal, such as South Korea, Thailand, India, Indonesia, Russia and Turkey.
The addition of countries other than China also addresses the issue of China using other Asian nations to send cheap Chinese imports via transshipments from those countries to escape tariffs.
Mr Trump has imposed a 25 per cent tariff on cars imports, with exemptions for vehicles with US content assembled in Mexico.
Ms Sheinbaum’s ruling party holds a majority in Congress, and the Bill is likely to pass.
AFP, BLOOMBERG
