High Tariffs May Slow China’s Electric Car Invasion In Mexico

Chinese electric vehicles have been storming into Mexico. Last month alone, the country imported 19,344 EVs from China, which is a staggering jump of 2,367% compared to the same period last year. It was starting to feel like Mexico was the new playground for Chinese electric cars. But that party might be ending sooner than expected - someone just flipped the “no entry” sign at the gate.

Earlier this month, Mexico’s Congress approved a set of tariffs targeting countries that don’t have free trade agreements with the country. That list includes several Asian nations, such as India, Indonesia, Thailand, and South Korea, and, perhaps most significantly, China, one of Mexico’s biggest trading partners. While most tariffs are set around 35%, Chinese imports could face rates as high as 50%.

The measures cover a wide range of products: automobiles and car parts, motorcycles, trailers, clothing, steel, plastic, household appliances, aluminum, shoes, paper, and furniture. Mexico’s Ministry of Economy says the goal is to “safeguard roughly 350,000 jobs” in sectors like footwear, textiles, steel, and automotive, while also addressing what it describes as “trade distortions” and the country’s “high dependence on imports.”

It’s not a move that’s gone unnoticed abroad. China has strongly criticized the tariffs, warning they could “substantially harm” the country and other affected trading partners. The Chinese Ministry of Commerce called Mexico’s actions “unilateral” and “protectionist,” urging the government to reconsider.

For now, it’s unclear whether China will take things further than just complaining. The new tariffs are expected to bring in around $3.76 billion for Mexico, but one thing’s obvious: cheap Chinese EVs flooding into the country might not be so easy to find anymore - at least for the time being.