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Mexico cautions US restriction on Chinese vehicle tech might harm automotive market

The Mexican government on Monday raised concerns about the Biden administration's proposal to restrict essential Chinese software application and hardware in linked vehicles on American roads due to national security issues.

Mexico's economy ministry said in a filing with the U.S. Commerce Department the proposal could have a considerable. effect on Mexico's automotive industry. Economically, it postures. potential trade barriers, interruptions to provide chains,. increased production expenses, and a possible danger of minimized. direct and indirect work.

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 substantial escalation in U.S. constraints on Chinese automobiles, software and parts and. would successfully prohibit the import of Chinese brand name automobiles--. even if they were put together in Mexico.

In September, the Biden administration secured steep. tariff hikes on Chinese imports, including a 100% duty on. electrical lorries and hikes on EV batteries and essential minerals.

Mexico stated the proposition could break North American free. trade rules and result in increased production costs due to the. shift in suppliers of car parts and components within the. automobile industry's pre-planned supply chain.

The Commerce Department did not immediately comment.

The proposal would make software application prohibitions reliable in. the 2027 model year. The hardware restriction would take effect in the. 2030 model year or January 2029.

The Alliance for Automotive Innovation, representing General. Motors, Toyota Motor, Volkswagen,. Hyundai Motor and other major automakers requested for. a minimum of one extra year to fulfill the hardware requirement.

The Customer Innovation Association requested both due dates. to be extended by two years as did Honda Motor in order. to carry out essential testing, validations, and updating of. required contracts.

The Commerce Department wants to complete the proposition by. Jan. 20. The guidelines cover all on-road cars however exclude. farming or mining cars not used on public roads, as. well as drones and trains.

(source: Reuters)