Mexico Modifies Laws To Phase Out Chinese Components

In response to allegations that Mexico serves as a conduit for Chinese parts into North America, the Mexican government is making significant efforts to substitute Chinese imports with domestically produced components.

Mexico's initiative dates back to the global supply chain crisis of 2021, which disrupted production worldwide due to shortages, especially of Asian-made computer chips. I Photo: Ford Media

This move is aimed at preserving its place in the US-Mexico-Canada Agreement (USMCA), Maria Verza reported for the Associated Press.

President Claudia Sheinbaum has confirmed that the government has launched a campaign encouraging companies to replace Chinese parts with locally sourced alternatives.

“We aim to substitute these imports and produce the majority of parts in Mexico, using Mexican or primarily North American companies,” Sheinbaum stated.

The initiative dates back to the global supply chain crisis of 2021, which disrupted production worldwide due to shortages, especially of Asian-made computer chips. Despite progress, challenges remain—particularly as even the U.S. struggles to onshore semiconductor production despite massive subsidies.

Mexico has benefited from job creation as automakers shifted production to its lower-cost facilities under the USMCA.

However, concerns that Chinese components are leveraging this arrangement to harm U.S. industries have fueled tensions. Economy Secretary Marcelo Ebrard announced that Mexico would begin producing microchips in 2025.

"They won’t yet be the most advanced chips, but it’s a start," Ebrard said. The initiative is seen as a critical step in aligning Mexico’s supply chain with North American standards and strengthening its trade ties under the USMCA.