Mexico’s tariffs on Chinese vehicles
Port congestion, competition pressures loom as Mexico set to increase tariffs on Chinese vehicle imports
Automakers in Asia and logistics firms around the world are grappling with uncertainty as they begin to prepare for the impact of an increase in Mexico’s tariff on Chinese vehicle imports from 20% to 50%.
This change was announced in September by Mexico’s economy minister Marcelo Ebrard as part of Mexico’s 2026 budget, which is currently pending legislative approval. As previously reported by Automotive Logistics, China exported around 445,000 finished vehicles to Mexico, representing a 7% increase on the previous year.
According to data from the government of Mexico, China was the second highest value commercial origin of vehicles in Mexico in 2024 ($13.5 billion) behind the US ($25.7 billion, while data from COMTRADE shows that Mexico’s vehicle imports from China in 2024 totalled $13.54 billion.
Geopolitical implications
In response to news of Mexico’s planned tariff increases on Chinese imports, a spokesperson for China’s Ministry of Commerce issued a statement saying that it would “closely monitor” Mexico’s actions and “conduct careful assessment” of any final measures. “In light of the global opposition to the US’s widespread use of tariffs, countries should enhance communication and coordination to jointly safeguard free trade and multilateralism, and must not sacrifice the interests of third parties under external pressure,” the spokesperson said.
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In this statement, the spokesperson also suggested that any unilateral tariff increases implemented by Mexico would be seen as “appeasement and a concession to unilateral bullying” that would harm China and other trade partners and “severely undermine the certainty of Mexico’s business environment, diminishing investor confidence”.
“China and Mexico are important economic and trade partners, and we do not wish to see bilateral cooperation adversely affected,” the spokesperson added. “We call on Mexico to exercise the utmost caution and carefully weigh the potential consequences before taking any action.”
Impact at Mexican ports
As Chinese exporters rush to get stock into Mexico before additional tariffs come into effect, ports in Mexico are seeing a significant increase in volumes. Data from Mexico’s Ministry of the Navy (Semar) shows that the National Port System registered almost 6.3 million TEUs from January to August this year, representing a 1.4% increase when compared to the same period in 2024.
In August 2025 alone, the latest month on record, more than 850,000 TEUs were registered at Mexico’s ports – higher volumes than any other month of the year so far, according analysis by T21 Business Intelligence. On an individual port basis, the Port of Manzanillo also registered its highest levels of the year in August with 346,249 TEUs, with volume handled at the port in August having increased by 2.9% year over year.
Chinese OEMs adapt to US and Mexico tariffs
BYD, one of China’s biggest automakers, has already seen tariffs impact its plans in the Americas, it seems. According to the Financial Times, BYD first announced plans for a car plant in Mexico in 2023 and said the plant would create 10,000 jobs and produce 150,000 vehicles a year. However, it reported earlier this year that, according to two sources, progress was being stalled as a result of delayed approval from China’s ministry of commerce as trade uncertainty between China and the US persisted.
In July, Bloomberg reported that BYD had shelved its plans for a plant in Mexico. "Geopolitical issues have a big impact on the automotive industry," Stella Li, executive vice president of BYD, was quoted as saying. "Now everybody is rethinking their strategy in other countries; we want to wait for more clarity before making our decision."
However, Li told Reuters in September that “BYD hasn’t postponed any decision about a Mexico plant.” She described Mexico as a “very relevant” market for the company, and clarified that BYD’s proposed facility in Mexico would be intended to serve the Mexican market rather than export to the US.
Recent research from Brookings has found that it is likely that Chinese products are circumventing US tariffs and entering the US via Mexico and Canada. It found that from the introduction of the US-Mexico-Canada Agreement in 2020 to 2024, the share of US GDP attributed to trade with China dropped from 2.03% to 1.50%, while trade with Mexico grew from 1.51% to 1.73% of US GDP in the same timeframe. Trade with Canada also increased, from representing 1.26% of the US’ GDP in 2020 to 1.41% in 2024.
Uncertainty over trade in North America has already impacted automotive logistics operations in Mexico. For example, Tesla paused its plans to build a new gigafactory in Mexico ahead of the US election in 2024 – a project that has not seen any public developments since.
Despite uncertainty in the region, several OEMs have reiterated that Mexico remains a strategic hub for the automotive supply chain, with BMW having invested in the construction of a high-voltage battery assembly facility next to its San Luis Potosí plant and Renault opening a new international logistics network (ILN) centre in Mexico this year.
Parallels with trends in Europe
With tariffs on Chinese vehicle imports to Mexico expected to come into effect next year, comparisons can be drawn with circumstances in Europe over the past couple of years. In October 2023, the European Commission opened an anti-subsidy investigation into imports of EVs from China. By the following year, following the results of this investigation, duties were imposed on Chinese manufacturers deemed to be importing “unfairly subsidised” EVs. A rate of 17.0% was imposed on BYD, while Geely (18.8%) and SAIC (35.3%) were also subject to duties.
In response, BYD accelerated plans to produce vehicles in Europe, with plans already in place for plants in Hungary and Turkey. Meanwhile, Geely issued a statement expressing “great disappointment” in the decision, describing it as “not constructive” and claiming it “may hinder EU-China economic and trade relations, ultimately harming European companies and consumer interests.” SAIC, according to reports, requested a hearing with the European Commission to contest its decision.
“Protectionist tariffs, as introduced by the EU to protect legacy European OEMs from cheaper Chinese EV imports, are starting to work as intended,” observed Daniel Harrison, senior automotive analyst at Automotive Logistics. “Companies such as BYD, Chery and XPeng have not only built plants within Europe to circumvent those tariffs, but they have developed extended supply chains within Europe to bring down costs.”
He continued: “Mexico is implementing planning to introduce similar tariffs of up to 50% on cars imported from China, including EVs, to protect its domestic industry and also limit its trade deficit with China.”
Speaking at the Association of European Vehicle Logistics’ (ECG) annual conference this month, the association’s president Wolfgang Göbel highlighted that the “scale and speed of the dominance of the Chinese manufacturers… will probably intensify from here on out”. This, he said, would create a “significant upside” for China’s automotive industry “compared to a downside for basically everybody else.”
