Mexico has reportedly denied Chinese automakers access to government incentives due to pressures from U.S. officials.
According to a Reuters report, Mexican officials met with BYD, a major Chinese automaker, in January, marking the last meeting between both parties to date. During their conversation, company executives were told the brand would not be eligible for government subsidies, previously awarded to manufacturers for building facilities in the country, and that further talks with any China-based car brand were on hold indefinitely.
Reuters’ sources attributed Mexico’s stance to pressure from the Office of the United States Trade Representative, which they claimed has urged the country’s regulators to resist the Chinese car industry’s international expansion.
A large number of China’s manufacturers have already shipped exports to South America. Due to trade agreements between the U.S. and Mexico, officials worry that such vehicles could potentially cross the border, circumventing tariffs in the process.
U.S. automakers and politicians have shared varying concerns about the impact a wave of China-made vehicles could have on the car market. Citing the country’s access to cheaper labor and lower materials costs, companies have warned that it would be impossible to compete financially with brands such as BYD, which currently manufactures one of the cheapest electric vehicles on the market.
Others, such as President Biden, worry that Chinese models could be used to collect data on U.S. citizens. In recent months, politicians on both the left and the right have called for measures ranging from 100% tariffs to outright bans on China-made vehicles, including those shipped across the border from Mexico.
