Mexico raises tariffs on Chinese vehicles to 50%

The country’s economy minister Marcelo Ebrard said the measure is part of a wider draft bill that seeks to place higher tariffs on more than 1,400 types of imports to Mexico coming from countries that it has no trade agreement with.

Under the bill, other countries that would be charged the higher rate include South Korea, Thailand, India, Indonesia, Turkey and Russia.

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Mexico is also looking to target other imports including steel and textiles, which could also impact the automotive supply chain.

In recent years, Chinese automakers have been using Mexico as a nearshoring location, increasing the amount of vehicles it sends to Mexico,  making it harder for domestic and US-owned OEMs to keep up with Chinese carmakers' competitive pricing, and putting pressure on the country's supply chain and infrastructure. China exported around 445,000 finished vehicles to Mexico in 2024, up 7% compared to the previous year.

Back in 2021, Chinese OEM GAC began exporting vehicles to Mexico in its first major push to breakthrough into the North American market. Although they were shipped under the Dodge brand, a division of Stellantis, the SUVs were built on GAC’s GS5 vehicle design and made at its factory in Hangzhou.

Some other Chinese OEMs have been vertically integrating their finished vehicle logistics to move more vehicles into Mexico and work around shipping and ro-ro capacity constraints. SAIC Motor uses its subsidiary, Anji Logistics, to ship its MG models from China to Mexico. Anji Logistics operates a network of shipping routes and owns a fleet of ro-ro vessels and partnered with MG UK to provide end-to-end vehicle logistics services. Anji Logistics also provides services for other Chinese OEMs including Great Wall Motor.

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At last year’s ALSC Mexico, Lizette Gracida, senior director of external affairs and trade compliance, Toyota Motor de México said that increasing vehicle imports from China are causing a strain on Mexico’s supply chain. She said: “We have witnessed imports from China increasing and they are severely stressing the logistics chain. There is potential for further growth for trade and for the supply chain. However, I also believe it is key to modernise the existing infrastructure and also develop new infrastructure if we want to continue supporting this growth.”

Roland Foch, managing director of the North American Vehicle Trade Association (NAVTA) previously predicted a stronger protectionist stance to be taken by Mexico. In May, he told Automotive Logistics: “In my view, Mexico may eventually reconsider its approach, especially in light of Europe’s recent actions to counter the influx of aggressively priced Chinese vehicles.”

The new tariff rate the tariff is expected to become law once the 2026 budget is approved by congress and would initially be imposed until December 31, 2026, with the possibility of extension beyond that.