Chinese Truck Manufacturers Rush Mexico Strategy on Tariff Fears

Chinese truck manufacturers operating in Mexico are accelerating local strategies as they brace for a possible import tariff of up to 50% on vehicles from countries without trade agreements. The proposal has not clarified whether it will apply to trucks, tractors or buses, but companies expect broad coverage. Several manufacturers have begun talks with authorities, adjusted investment plans or fast-tracked facility construction to offset potential cost increases.

BYD has initiated discussions with federal authorities to prevent its electric truck line from falling under the proposed tariff. Julián Villarroel, BYD’s corporate vice president in Mexico, said to Expansión, the company “understands the regulation Congress is considering on tariffs,” but is asking regulators to recognize the company’s focus on electric mobility. He stated that BYD is “trying to raise awareness so that electric mobility is not taxed.” BYD operates about 700 electric trucks in the country and aims to close the year with 1,200 units, increasing to 5,000 in 2026. Villarroel said the company’s growth depends on regulations that “do not stop us.”

Market participants say the uncertainty is affecting buyers and distributors. Philipp Heldt, general manager of Magna — importer of Dongfeng units — said regulatory signals have created “nervousness in the market, not only among producers but also customers.” He added that Magna will remain in Mexico and “act accordingly” once tariffs are defined. The company recently invested more than US$5 million in a parts distribution center in the State of Mexico.

Uncertainty has led some manufacturers to accelerate local production plans. Shacman advanced its transition from importer to producer and is building a plant in Puebla. Carlos Pardo, the company’s president and CEO, said the firm is investing US$15 million and expects operations to begin mid-next year. He explained that exporting to the United States is no longer a priority due to political conditions, noting that discussing truck shipments “is very complicated” under the current US administration.

Manufacturers with existing local operations face additional challenges tied to components. Foton, which produces in Jalisco, is preparing for the possibility that tariffs could apply not only to imported vehicles but also to parts sourced from China. Francisco Chávez, CEO of Foton Mexico, said the company aims to increase local supplier participation to mitigate volatility. He explained that the company is evaluating costs because the tariff level is still uncertain, saying Foton will try to “contain and not reflect increases in month one” and will adjust gradually based on final government decisions.

Mexico’s Economy Ministry, presents the tariff measure as a way to “protect the national industry and slow the surge of low-cost Chinese vehicles,” but many in the sector view it as an improvised barrier against competition the country failed to anticipate. After decades of relying on open markets and trade agreements, the rapid growth and low prices of Chinese electric vehicles have challenged that model, raising questions about whether full openness is still sustainable for Mexico.

Mexico’s auto industry warns that proposed tariffs on Chinese imports could disrupt vehicle production by cutting access to essential electronic components, especially touchscreen displays that Mexican factories do not produce and for which Chinese suppliers dominate the market. Companies say finding alternative sources would take years and raise costs immediately, putting pressure on one of Mexico’s main export sectors as Congress considers higher tariffs amid US–China trade tensions.

Industry representatives, including German supplier Aumovio, told authorities that building new supply chains would require significant investment and training. The Mexico-China Chamber of Commerce also cautioned that key components such as batteries and electronic parts are difficult to source elsewhere, noting that China remains the most efficient supplier for these technologies.