Mexico to Hike Tariff on China-Made Cars to 50%
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Mexico’s legislature has voted to increase the tariff on Chinese light vehicles to 50% from the current 20%, a move that threatens to slam the brakes on China’s booming car exports to its largest overseas market.
The tariff proposal, passed by both houses of the Mexican congress on Tuesday local time, is part of a broader plan to raise import duties on about 1,100 types of goods from countries that do not have free trade agreements with Mexico. The new rates are set to take effect on Jan. 1, 2026, pending the president’s signature.
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- Mexico will increase tariffs on Chinese light vehicles from 20% to 50%, effective January 1, 2026, impacting around 1,100 product types.
- Mexico is China’s largest auto export market, receiving 483,000 Chinese vehicles (Jan–Oct 2025); October exports surged 119% year-on-year.
- The tariff hike may slow China’s auto export growth from ~20% to 8–10% in 2026, and Chinese authorities will tighten export controls on electric vehicles.
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Who’s Who
- BYD Co. Ltd.
- BYD Co. Ltd. (比亚迪股份有限公司) has paused its plans to build a factory in Mexico. This decision comes amidst Mexico's legislature voting to increase tariffs on Chinese light vehicles to 50%. Despite not reporting sales figures to the Mexican Association of Automotive Distributors, BYD's presence likely contributes to the higher actual market share of Chinese brands in Mexico.
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What Happened When
- First 10 months of 2025：
- Mexico received 483,000 vehicles from China, a 25% year-on-year increase.
- First 10 months of 2025：
- Chinese brands sold 92,000 light vehicles in Mexico, accounting for 7.7% market share.
- September 2025：
- The tariff hike on Chinese car imports to Mexico was first proposed.
- October 2025：
- Chinese car exports to Mexico surged 119% to 70,000 vehicles.
- Tuesday, December 9, 2025：
- Mexico’s congress passed the proposal to raise the tariff on Chinese light vehicles to 50%.
- Thursday, December 11, 2025：
- China’s Ministry of Commerce criticized the planned tariff hike.
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