Mexico weighs 50% tariff on Chinese cars amid US pressure

Mexico is considering a sharp increase in tariffs on Chinese car imports, proposing a 50% duty — up from the current 15–20% — as it faces mounting U.S. pressure to curb Chinese goods entering North America through its territory.

The proposal, included in a bill submitted to Congress, aligns with U.S. President Donald Trump’s push for trading partners to raise barriers against Chinese exports. Washington has accused Chinese manufacturers of exploiting the US-Mexico-Canada Agreement (USMCA) by routing products through Mexico to reach U.S. markets tariff-free.

Mexican President Claudia Sheinbaum has also voiced concern about the impact of Chinese imports on local industries. The draft legislation describes the higher tariffs as a way to protect 19 “strategic” sectors, support domestic production, and improve Mexico’s trade balance.

If passed, light vehicles from China would face a 50% tariff, while auto parts would be taxed at 10–50%. Tariff hikes would also apply to other countries without free trade deals with Mexico, including South Korea, India, Indonesia, Russia, Thailand, and Turkey.

Mexico’s economy ministry said the move would safeguard 325,000 jobs in key industries and generate thousands more. Currently, two out of every ten cars sold in Mexico are Chinese, with sales rising 10% last year.

The Latin American nation overtook China in 2023 as the United States’ largest trading partner, with over 80% of Mexican exports going north — including nearly three million vehicles annually, many produced by U.S. and global automakers such as General Motors, Ford, Volkswagen, Nissan, Honda, and Toyota.

Trump has already imposed a 25% tariff on imported cars, though vehicles assembled in Mexico with U.S. content are exempt. With Sheinbaum’s ruling party holding a congressional majority, the bill is widely expected to pass.