Mexico Imposes 50% Tariff on Chinese Cars

Mexico plans to introduce a 50% tariff on cars imported from countries without a free trade agreement, including China, South Korea, and India. The main impact will be on Chinese-made electric vehicles, especially from companies like BYD and Tesla. The tariff, which requires approval from Congress where the Morena party dominates, could slow the growth of the electric vehicle market in Mexico, which is considered the fastest-growing in North America. In recent years, tariffs on Chinese electric vehicles have already increased from 0 to 15%, and this new step will be a significant tightening.

Traditional American automakers — General Motors, Ford, and Stellantis — will avoid the consequences thanks to a 2003 decree allowing companies with factories in Mexico to import some cars duty-free. Unlike them, Tesla and BYD do not have production facilities in the country. Tesla has suspended the construction of a large factory in northern Mexico due to economic difficulties, and BYD has abandoned similar plans due to political risks and pressure from the United States.

Tesla, which supplies Model 3 and Model Y models to Mexico from Shanghai, may mitigate the impact through car stocks. BYD, which sold 40,000 cars in 2024, accounting for almost half of the Mexican electric vehicle market, will face the threat of rising prices due to tariffs. China has called on Mexico to reconsider the decision, warning of the consequences for the business climate. Analysts note that tariffs could strengthen the position of American manufacturers but complicate the development of the electric vehicle market.

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