BYD’s Fang Cheng Bao brand unveiled the Leopard 8 among three cars in Shenzhen on April 16, 2024. China’s Ministry of Commerce warned Mexico of countermeasures as Mexico plans to raise tariffs on Asian-made cars to 50%. The increased duties need Congressional approval and would take effect 30 days later.

Mexico’s Secretary of Economy plans to raise tariffs on vehicles from Asia, particularly China, to 50% from 20%. China expressed concern over the impact on economic cooperation between the two countries. China warned it would take necessary measures to safeguard its rights and interests in response to Mexico’s tariff plans.

In the ongoing trade tensions with the U.S., China has imposed restrictions on exports of minerals critical to car and technology production. Mexico benefits from USMCA for tariff-free trade but faces stricter regulations than under NAFTA. Mexico’s auto industry is the country’s largest employer.

More than 20 Chinese auto parts and manufacturers have announced over $7 billion in investments in Mexico from June 2022 to July 2024. BYD has not yet built a factory in Mexico. China sees Mexico as a top destination for car exports, taking market share from other Asian brands.

Chinese autos are gaining market share in Mexico, often from other Asian brands rather than Western ones. Despite potential tariff increases, the value proposition for Chinese cars remains strong. China is taking steps to protect its interests in response to escalating trade tensions with Mexico.

Read more at CNBC: China urges Mexico to ‘think twice’ on tariffs, warns countermeasures