Mexico's federal government, under pressure from the U.S., is keeping Chinese automakers at arm's length by refusing to offer such incentives as low-cost...
FILE PHOTO: Electric vehicle models are displayed at the booths of Denza and Chinese EV maker Voyah, at a shopping mall in BeijingMEXICO CITY - Mexico 's federal government , under pressure from the U.S., is keeping Chinese automakers at arm's length by refusing to offer such incentives as low-cost public land or tax cuts for investment in EV production, three Mexican officials familiar with the matter said.
Reuters was not able to ascertain which Chinese automakers have requested meetings since. Mexican government officials typically do not disclose subsidies given to the companies for plants. The U.S. intervention reflects increasingly acute fears from its automotive industry, unions and U.S. political circles that Chinese automakers such as BYD, SAIC, Geely, Chery and JAC aim to use Mexico as a back door to sell cheap electric cars in the United States without paying steep U.S. tariffs, now at 27.5%.
"A sizeable proportion of the goods arriving in Mexico by ocean will likely be trucked into the U.S., which gives rise to the suspicion that the increase in trade we are witnessing is due to importers trying to circumvent U.S. tariffs," said Peter Sand, chief analyst with research firm Xeneta. Federal incentives have in the past been generous, including free land, water and energy facilities and help in hiring workers, said Francisco Bautista, a partner at EY in Mexico.
The officials met again in January 2024 in Toronto, where another request was made by U.S. officials to hinder Chinese automakers.Mexican officials said that although Chinese investment could help the local economy, the government is concerned about angering Washington with USMCA up for revision in 2026.
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