Aggressive tariffs on Chinese car imports to Mexico?
Mexico is gearing up to tweak both its tariff-rate quotas and general import duties on Chinese vehicles. But the real question is: how hard-hitting will these measures be?
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Just a few weeks ago, USMEXCHINA explored the prospect of Mexico slapping new tariffs on Chinese-made imports—and now the auto industry looks set to be next in line.
Mexico: Top Destination for Chinese Cars
Over the past five years, Chinese-made vehicles have steadily gained ground in Mexico, thanks in part to partnerships with big Western brands like General Motors. And here’s the kicker: last quarter, Mexico overtook Russia as the leading destination for Chinese auto exports—mainly because Moscow hiked taxes on cars routed through Central Asia.
Tariff Quota Adjustments
Lately, Mexican top officials have been saying it’s time to revisit the tariff quotas on cars coming in from non-FTA partners—chiefly China and India—to protect Mexico’s homegrown production. Ximena Escobedo Juárez, who heads the Ministry of Economy’s Productive Development Unit, even confirmed that a decree is in the works to tighten those quotas. Don’t expect it to kick in overnight, though.
The aim? Rein in imports of entry-level and mid-range models, boost local assembly and content, and shore up the domestic auto sector. Right now, only one in four light vehicles built in Mexico actually stays here: in April 2025, we churned out 326,069 light vehicles but shipped 256,953 abroad (INEGI).
Tightening Tariff Quotas
If you look at the duties Mexico’s already slapped on Chinese and Indian imports, you’ll see they’ve targeted industries where foreign inputs can realistically be swapped for local or regional ones. Take textiles: a 35% tariff hit that sector in November 2024. With autos, though, any similar—or steeper—levies will have to be rolled out carefully, alongside incentives to ramp up domestic output.
These moves would all fall under Plan México. In the auto sector, the target is for 50% of domestic consumption to come from Mexican-made products — up from 34% in 2024. That said, for tariffs on Chinese cars to really pack a punch, they’d have to climb above the current 20% level. Over the medium term, expect tighter tariff-rate quotas and maybe even alignment with the U.S.’s steeper duties.
Why the holdup?
Internal constraints: Mexico’s manufacturing plants currently lack the capacity to satisfy a larger share of demand for entry- and mid-range vehicles.
External uncertainty: The final shape of USMCA tariff talks is still up in the air.
Reining in Smuggled Used Cars
Let’s not forget the “autos chocolate.” The Mexican Association of Automotive Distributors (AMDA) has been on President Sheinbaum to shut down the loophole letting in smuggled used cars, arguing it undercuts local production and sales. AMDA wants that regularization decree repealed and replaced with tougher rules that favor Mexico-assembled vehicles.
The federal government is drafting a new decree that would only legalize used cars assembled in the U.S. or Canada.
Possible Roadmap of Actions
Given the limited capacity of Mexico’s auto industry, any policy shift will likely roll out in phases:
Clamp down on “autos chocolate.”
Review and tighten tariff-rate quotas.
Hike duties on Chinese-made vehicles — probably syncing them with U.S. levels.
At USMEXCHINA, we’ll be watching every move.