The Mexican government on Monday raised concerns about the Biden administration’s proposal to prohibit key Chinese software and hardware in connected vehicles on American roads over national security concerns.
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Mexico’s economy ministry said in a filing with the US Commerce Department the proposal could have a “substantial impact on Mexico’s automotive industry. Economically, it poses potential trade barriers, disruptions to supply chains, increased production costs, and a possible risk of reduced direct and indirect employment”.
Car and tech groups separately on Monday asked the administration for changes and for more time before the rule takes effect.
The proposal marked a significant escalation in US restrictions on Chinese vehicles, software and components and would effectively ban the import of Chinese-brand vehicles – even if they were assembled in Mexico.
In September, the Biden administration locked in steep tariff rises on Chinese imports, including a 100 per cent duty on electric vehicles and increases on EV batteries and key minerals.
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Mexico said the proposal could violate North American free trade rules and “lead to increased production costs due to the shift in suppliers of auto parts and components within the automotive industry’s pre-planned supply chain”.