Mexico Removes 10% Auto Parts Tariff for Five Years

The Mexican government has announced the elimination of the 10% tariff on auto parts imports from around the world for a five-year period. The measure is part of a strategy to attract additional investment in the automotive sector.

The unilateral reopening took place through a decree issued by the Office of the President of the Republic, which was published in the Official Gazette of the Federation (DOF) and will take effect in mid-October.

The decree amends the Schedule of the General Import and Export Tax Law and introduces tariff classification 9803.00.01 for the imports covered by the measure.

The tariff exemption will apply to auto parts and components used in vehicle assembly by automotive and manufacturing companies holding bonded warehouse authorization under the Customs Law. Eligible companies must also comply with the guidelines established by the Ministry of Economy.

“In the current context of the reconfiguration of global supply chains and the relocation of manufacturing operations, it is necessary to strengthen Mexico’s competitive position as an investment destination for the automotive industry, particularly for projects that involve the gradual establishment of manufacturing operations through Semi Knocked Down (SKD) or Completely Knocked Down (CKD) vehicle assembly schemes,” stated President Claudia Sheinbaum in the decree.

According to the federal government, the temporary tariff exemption will make it possible to reduce the costs of establishing and operating new automotive projects, thereby encouraging the establishment of production lines in Mexico, the creation of specialized jobs, the transfer of technology, and the strengthening of domestic supply chains.

This will help promote the establishment and expansion of automotive projects within the country, strengthen the regional integration of value chains, increase the competitiveness of the Mexican automotive industry, and contribute to economic development and job creation.