Mexico Moves Ahead With New Tariffs on Chinese Automotive Imports

Mexico is moving forward with a tariff reform that would modify 1,463 tariff items across multiple industrial sectors, including automotive, textiles, plastics, steel, and aluminum. The reform, proposed by President Claudia Sheinbaum, aims to impose tariffs on products from China and countries without a trade agreement with Mexico. The legislative process advanced after the lower house’s Economic, Trade and Competitiveness Commission approved the draft with 10 votes in favor, one against, and eight abstentions. The proposal now moves to a full vote in the Chamber of Deputies.

Commission President Miguel Salim said the project underwent changes to “about 60%” of its content to address concerns from domestic industries. He stated that the goal is to “provide certainty and fair market conditions” for sectors affected by unfair trade practices. According to Salim Alle, the reform maintains the total number of tariff items at 1,463, despite eliminating 115 and adding another 115 during the review process.

A total of 706 items correspond to textiles, 249 to iron and steel, 94 to automotive goods, and 81 to plastics. Of the items included, 316 currently face no tariff, while others already have duties. The commission reported that 341 items carry a 35% tariff and 302 apply a 10% rate. After discussions with the Ministry of Economy, 391 items will maintain their previous tariff levels.  Of the remaining 1,072 items, 596 registered import volumes below US$1.5 million per year. For another 476 items, at least 50% of supply originates from free-trade partners—conditions officials say should help limit negative effects.

Salim Alle added that two-thirds of the package, or 974 items, received “a generalized reduction of 28%” compared with the tariff levels originally proposed by the executive branch. He also confirmed that more than 40 automotive-parts items were removed and that about 30 items tied to distributor requests were adjusted.

Lawmakers raised concerns about the potential impact on production costs and consumer prices. Deputy Gloria Núñez said it was important to analyze how tariffs on inputs used throughout national value chains might affect competitiveness. She questioned whether the adjustments would strengthen domestic capacity or simply increase costs for consumers. Deputy Santiago González said the intent is to “support, protect, give incentives and avoid inflation,” but acknowledged that risks remain and that further proposals may be introduced during the plenary debate.

Deputy María Granados said the reform would allow Mexico to defend itself from unfair trade practices and protect its industrial base. Morena deputy Sebastián Ebrard Lestrade argued that inflationary effects should be limited because most of the tariff adjustments apply to items with low weight in the Consumer Price Index and several substitution alternatives.

The automotive sector remains one of the most sensitive areas under negotiation. The current draft proposes tariffs of 25%–35% for certain imported light vehicles—a reduction from the earlier ceiling of 50% proposed in September. The package includes at least 141 auto-parts items and 13 models of light vehicles.

Industry associations, including the Mexican Association of Automotive Distributors (AMDA), the Mexican Automotive Industry Association (AMIA) and the National Auto Parts Industry (INA), participated in working sessions with lawmakers. “We will be attentive to the ruling of this initiative,” said Christina Vázquez, AMDA’s economic studies manager. INA’s economic studies manager, Julio Galván, said the association is working with the Ministry of Economy and providing “strategic and intelligence information” on the sector.

Industry representatives have highlighted China as the most sensitive issue. When the proposal was introduced in September, AMDA warned that vehicles imported from China support around 30,000 jobs in Mexico and generate investments of roughly MX$60 billion. The association maintains that tariffs are not the most effective way to increase domestic production for the local market. About 87% of Mexico’s automotive output is exported, limiting the impact of domestic-oriented measures.

If approved, the tariff changes would affect companies such as BYD and Chirey, which would face duties expected to range from 25% to 35%.