*

Mexico warns of trade barriers, supply chain disruptions,

and

job losses

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Automakers and tech groups request more time for

compliance

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Proposal could violate North American free trade rules,

Mexico

says

By David Shepardson

WASHINGTON, Oct 28 (Reuters) - The Mexican government on

Monday raised concerns about the Biden administration's proposal

to prohibit key Chinese software and hardware in connected

vehicles on American roads due to national security concerns.

Mexico's economy ministry said in a filing with the U.S.

Commerce Department the proposal 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."

Automaker and tech groups separately on Monday asked the

administration for changes and for more time before the rule

takes effect.

The proposal marked a significant escalation in U.S.

restrictions on Chinese vehicles, software and components and

would effectively ban the import of Chinese brand vehicles --

even if they were assembled in Mexico.

In September, the Biden administration locked in steep

tariff hikes on Chinese imports, including a 100% duty on

electric vehicles and hikes on EV batteries and key minerals.

Mexico said the proposal could violate North American free

trade rules and "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."

The Commerce Department did not immediately comment.

The proposal would make software prohibitions effective in

the 2027 model year. The hardware ban would take effect in the

2030 model year or January 2029.

The Alliance for Automotive Innovation, representing General

Motors ( GM ), Toyota Motor ( TM ), Volkswagen,

Hyundai Motor ( HYMTF ) and other major automakers asked for

at least one additional year to meet the hardware requirement.

The Consumer Technology Association asked for both deadlines

to be extended by two years as did Honda Motor ( HMC ) in order

"to conduct crucial testing, validations, and updating of

necessary contracts."

The Commerce Department hopes to finalize the proposal by

Jan. 20. The rules cover all on-road vehicles but exclude

agricultural or mining vehicles not used on public roads, as

well as drones and trains.