MEXICO · TRADE
Key Facts
- —The country Mexico is a major car-making country that builds vehicles for the US market under the USMCA trade pact with the United States and Canada.
- —Why it matters The zero tariff on car assembly parts is open only to the 11 light-vehicle makers that already have plants in Mexico, not to importers of finished cars.
- —Why now The Economy Ministry issued its clarification on Friday 16 October, two days after the decree took effect, because the decree had been read in different ways.
- —What happened The ministry said only plant-owning carmakers with a bonded-warehouse permit and its prior approval can bring in parts at the zero rate.
- —The numbers The tariff on the customs line was 10% and is zero for five years from 14 October. In 2025 just 0.01% of Mexico’s automotive imports used that line.
- —What it means for you A carmaker without a Mexican plant cannot use the waiver, and each qualifying import needs prior permission and vehicle-by-vehicle tracking.
- —Still open The ministry has not named the 11 makers or published the guidelines with minimum output and caps on parts imports.
- —Power Index Mexico ranks 2nd of 14 in The Rio Times Latin America Power Index, with 71.4 points (October 2026 edition).
Mexico’s Economy Ministry said on Friday 16 October that only 11 carmakers with Mexican plants can use the car parts tariff waiver. For US readers, the limit keeps the benefit with makers that already build cars for North America, not with importers of finished vehicles.
The ministry spoke after the decree of Tuesday 13 October drew differing readings. The decree took effect on Wednesday 14 October and runs for five years.
What the Economy Ministry Said on 16 October
The ministry said the decree does not ease parts imports for companies without productive facilities in Mexico. It added that the decree does not ease access for vehicles from countries without a trade deal with Mexico.
In its statement, titled “Decree Exemption of Tariff for Importing Assembly Material” in our translation, it said only firms with plants in Mexico qualify. It counted those firms at 11 light-vehicle makers and did not name them.
The ministry listed three aims drawn from the decree itself. They are protecting jobs, making Mexico more competitive for investment, and moving production lines from abroad to carmakers already working in the country.
Economy Secretary Marcelo Ebrard, the cabinet minister who runs trade policy, co-signed the decree with President Claudia Sheinbaum. Finance Secretary Édgar Amador Zamora also signed it on Friday 9 October.
How the Car Parts Tariff Waiver Works
The decree changes one customs line, 9803.00.01, which covers parts and components for assembling cars. The line carried a 10% import tariff until 13 October and now carries none for five years.
Importers must hold a bonded-warehouse authorisation for assembling and making vehicles under Mexico’s Customs Law. They must also follow guidelines that the ministry has said it will issue.
Every import will need prior permission from the ministry, which says this lets it check that firms meet the rules. The tax agency SAT and the national customs agency ANAM will run controls.
Firms must report the vehicle identification numbers of cars built with imported parts and supply data that traces those parts. The guidelines will also set minimum output of complete vehicles in Mexico and caps on parts imports as a share of that output.
Only a high level of full-vehicle production will entitle a maker to import parts for kit assembly, the ministry said. Kit assembly means semi knocked down (SKD) or completely knocked down (CKD) cars, which arrive as partly or fully dismantled sets.
Why Mexico Wants Assembly Lines at Home
The ministry says the goal is to move from assembly to full car manufacturing, with local content rising step by step. It also wants fewer imports of finished vehicles from countries with which Mexico has no trade treaty.
As an example, it cited Sheinbaum’s announcement in May that General Motors, the US carmaker, would move two production lines from China to Mexico. Those lines will start with assembly and add local content gradually, the ministry said.
The customs line has seen little use so far. In 2025, only 0.01% of Mexico’s total automotive imports entered under that code, the ministry said.
The decree’s text and timing are set out in Mexico Scraps 10% Tariff on Car Parts. The pressure from Chinese brands on Nissan, GM and Volkswagen is covered in Chinese car brands squeeze Nissan, GM and Volkswagen in Mexico.
How It Fits the 50% Tariff on Cars From Non-Treaty Countries
Since 1 January 2026, Mexico has charged up to 50% on many passenger cars from countries without a trade deal, China among them. A separate decree published on 29 December 2025 set that rate, and this one does not change it.
The ministry says the waiver is a narrower tool for plants already operating in Mexico. It stresses that the measure aims to strengthen the local supply chain.
The wider trade backdrop is explained in Mexico Geopolitics 2026, US Tariffs, USMCA and China. The cost side for North American carmakers is in Auto Tariffs Hit North America Supply Chain.
What It Means for You
If you follow US carmakers with Mexican plants, the waiver can lower the cost of new assembly projects, as the decree itself says. Each project still has to clear the permit, tracking and output tests.
If you track Chinese brands’ plans for Mexico, the statement gives no opening to firms without a plant in the country. It also leaves the 50% tariff on cars from non-treaty countries in place.
If you are buying a car in Mexico, nothing in the statement lowers the price of imported models. Readers who live in the capital can find local context in our Mexico City expat city guide and in Who Runs Mexico’s Economy, the Key Players in 2026.
What Is Not Known
The ministry has not named the 11 makers or said which of them have applied for permits. It has not yet published the guidelines, so the minimum output and the cap on parts imports are unknown.
The statement gives no estimate of how many cars the waiver will cover or what it will cost in lost tariff revenue. It also does not say when the first permits will be granted.
None of the sources reviewed shows a reaction from Washington. It is not known whether the waiver will feature in the USMCA review talks.
Frequently Asked Questions
What did Mexico’s Economy Ministry say on 16 October?
It said only companies with plants in Mexico, 11 light-vehicle makers in all, can import car assembly parts at the zero tariff. It said the decree does not ease parts imports by firms without local plants or access for vehicles from countries without a trade deal.
How many carmakers can use the zero tariff?
The ministry puts the number at 11 light-vehicle makers with productive facilities in Mexico. It has not named them.
What is customs line 9803.00.01?
It is the tariff line for parts and components used to assemble cars by makers with a bonded-warehouse permit. It carried a 10% import tariff until 13 October.
Does the waiver cut the 50% tariff on cars from non-treaty countries?
No, that tariff has applied since 1 January 2026 and the decree does not change it. The ministry says the waiver will not ease access for such vehicles.
When does the waiver start and end?
It took effect on Wednesday 14 October 2026, the day after publication in the official gazette. It runs for five years from that date.
Sources: Secretaría de Economía, statement of 16 October 2026; Diario Oficial de la Federación, decree published 13 October 2026; Contralínea, 16 October 2026; El Financiero, 13 October 2026; Diario Oficial de la Federación, tariff decree published 29 December 2025; El CEO, December 2025.
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Editorial responsibility: Matthias Camenzind, Editor-in-Chief · Editorial standards · Report an error