Chinese EV issue part of U.S. trade talks, Mexico foreign secretary says
Context:
Ongoing USMCA/CUSMA trade discussions involve how to handle Chinese electric vehicles entering North America, with Mexico urging tariff considerations and trilateral cooperation. Mexican foreign affairs chief Roberto Velasco Alvarez and Canada’s Anita Anand frame the talks as part of broader USMCA reviews, aiming to lower U.S. tariffs on Mexico and preserve trilateral ties. Chinese EVs have become a notable friction point, accounting for about 20% of Mexico’s auto market, while Canada has already allowed tens of thousands of Chinese EVs at favorable tariff rates. The process entails a rolling annual review for up to a decade if extensions aren’t agreed, underscoring the complexity and forward outlook of North American trade relations. Both sides emphasize bilateral and trilateral dialogue to safeguard the integrated trading relationship.
Dive Deeper:
Velasco Alvarez told reporters in Ottawa that Chinese EVs entering the North American market are part of the USMCA discussions and that efforts continue to lower the tariffs the United States has imposed on Mexico.
The USMCA, known in the U.S. as USMCA and in Mexico as T-MEC, governs virtually all continental free trade, with a key mechanism being a rolling annual review that could last up to ten years if extensions aren’t agreed upon.
Chinese-made EVs now represent roughly 20% of Mexico’s automotive market, highlighting the scale of the sensitivities surrounding imports from China.
Canada recently agreed to allow up to 49,000 Chinese EVs into Canada at a most-favoured-nation tariff rate of 6.1%, a benchmark cited in discussions about broader North American trade dynamics.
Alvarez noted there are ‘bilateral issues’ that require direct U.S. engagement, while reaffirming that the USMCA remains a trilateral framework with ongoing trilateral as well as bilateral conversations.
Anand stressed that protecting and strengthening trade and investment links with both the United States and Mexico is fundamental, signaling a coordinated approach to the trilateral relationship amid ongoing negotiations.