Amid competitive concerns and others revolving around potential national security threats, more than one country has imposed higher tariffs on certain Chinese imports in recent months, but that may not be the end of such actions. Rather, as Ford Authority recently reported, the U.S. Commerce Department is considering a series of newly proposed rules that would prohibit the use of “key” Chinese software and hardware in connected vehicles on American roads, which would effectively ban all of those types of vehicles from the U.S. and also require automakers to remove that same hardware and software from their vehicles. Perhaps unsurprisingly, Mexico is concerned about this potential ban, specifically.
According to Reuters, the economy ministry of Mexico is concerned that this proposed Chinese tech ban 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.” Additionally, those same officials – along with a variety of industry groups – are calling for the Biden Administration to not only make changes to this proposed rule, but also, to allow for more time before it takes effect.
Mexico also argues that the proposal could potentially violate North American free trade rules, and since it would ban imports from that country into the U.S. that employ Chinese software or hardware, could also “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.” For now, the Commerce Department is eyeing late January as a deadline to finalize the proposal, which would impose software restrictions in the 2027 model year, followed by a hardware ban in the 2030 model year. Currently, a variety of Blue Oval models are built in Mexico, including the Ford Mustang Mach-E, Ford Maverick, and Ford Bronco Sport.
The Ford-backed lobby group Alliance for Automotive Innovation (AAI) has also come out and criticized this proposed rule, which could result in the Lincoln Nautilus being banned from the U.S., given the fact that it’s built in China currently. Meanwhile, Chinese officials have also spoken out about the proposal, calling for existing sanctions against Chinese companies to be lifted and stressing that the U.S. and China need to work together to foster a strong global supply chain, set national security boundaries, and create a cooperative business setting.
Comments
“Commerce Department is considering … rules that would prohibit the use of “key” Chinese software and hardware in connected vehicles on American roads”
I couldn’t agree more. China advances by stealing technology. They have few inventions if their own. Their corrupt government leads the way. I do not buy any electronics made in China. They hide spyware. I always check mfg before I buy a TV, laptop, etc. Anything electronic made in China has spyware. Don’t help them, don’t buy electronics made in China.
Mexico can use Chinese products in their nation. The tariffs are for any product with Chinese content reaching the U. S. so they must use only American (Mexican included) content and products in vehicles exported to the U.S. This will not affect their domestic industry. It will just reduce what they can export. Not such a big deal!
China knows that getting their EVs into Mexico is the perfect back door method to get them into the US. The effect of sub-$15k Chinese EVs will devastate the American auto industries.