MEXICO CITY — Mexico has announced a proposed 50% tariff on cars imported from China, a move that threatens to disrupt the country’s fast-growing electric vehicle (EV) market and hit global automakers Tesla and BYD the hardest.
Mexico Targets Non-FTA Imports
The tariff, unveiled Wednesday, would apply to all cars imported from countries without a free trade agreement (FTA) with Mexico, including China, South Korea, India, and Russia. However, analysts say the measure is aimed primarily at Chinese-made EVs, which dominate the Mexican market.
“This is a game-changer. A 50% tariff is extremely aggressive,” said Eugenio Grandio, president of the Electric Mobility Association in Mexico.
Tesla and BYD in the Crosshairs
- Tesla imports its Model 3 and Model Y from Shanghai, with stalled plans for a Mexico-based factory.
- BYD, China’s EV giant, sold 40,000 vehicles in Mexico in 2024, representing nearly half of all EV sales. Its proposed Mexico factory was scrapped amid trade tensions and U.S. pressure.
Both companies now face major uncertainty as tariffs climb from 0% in early 2023 to 15% last year, and now 50%.
U.S. Automakers Benefit
Traditional U.S. carmakers — GM, Ford, and Stellantis — are shielded by a 2003 regulation allowing them to import some vehicles tariff-free since they already operate factories in Mexico.
This means the new tariffs would disproportionately impact Tesla and BYD, while sparing America’s “Big Three.”
Global Trade Reactions
China urged Mexico to “think twice,” warning the tariffs would damage Mexico’s business environment. Meanwhile, Canadian auto lobbyist Flavio Volpe said the U.S. would welcome the move, as it boosts competition against China-backed automakers.
The measure still requires approval by Mexico’s Congress, where President Claudia Sheinbaum’s Morena party holds a majority.
