On October 13, 2026 the Federal Executive published in the Official Gazette of the Federation (DOF) a Decree amending the Tariff Schedule of the General Import and Export Tax Law (TIGIE) currently in force. The measure grants a full tariff exemption (0%) for a period of five years on imports of goods classified under tariff item 9803.00.01 ("Parts and components for the assembly of automobiles"), which were previously subject to a 10% rate.
Officially, the measure seeks to align the sector with the goals of the national strategy Plan México and the 2025-2030 Sectoral Economic Program by encouraging value chain integration, import substitution and the attraction of production lines to the country. However, from our practice at Baker Tilly and after analyzing the direct impact on senior management, I consider it crucial to break down the real scope of this decree for companies in the sector.
Much-needed relief amid constant cost pressure
Automotive industry contracts place constant pressure on suppliers to demonstrate efficiencies and cost reductions year after year. In many cases, automakers contractually require mandatory annual savings percentages from their supply chain.
In this context, eliminating the 10% tariff on assembly inputs and raw materials brought in through an automotive bonded warehouse provides direct relief to the operating cost structure. This reduction helps make vehicle production in Mexico more efficient and competitive in the face of global budget demands.
Global flexibility in the supply chain (SKD, CKD and sourcing)
The decree promotes the gradual establishment of operations under Semi Knocked Down (SKD) and Completely Knocked Down (CKD) assembly schemes in the country. While I recognize that the exemption alone is unlikely to drive a multimillion-dollar investment to build an assembly plant from scratch, it does considerably broaden the range of sourcing options.
With this exemption, assemblers gain an additional strategic alternative:
- International input diversification: they can purchase assembly materials from suppliers anywhere in the world and bring them into Mexico at a 0% rate without paying tariffs.
- Flexibility under the USMCA: it allows companies to operate efficiently while they manage or comply with the treaty's regional rules of origin.
A strategic "counterattack" by Mexico in the geopolitical landscape
Beyond the strictly tax-related sphere, I believe this decree works as a clear "counterattack" and a geopolitical signal from Mexico in response to pressure from the U.S. administration to relocate manufacturing plants to its territory.
With this move, the Mexican government shows it is easing the tax burden to counter those intentions:
- Retaining and encouraging installed investment: it gives established companies a concrete incentive not to move their operations to the United States.
- Attracting new production lines: it makes it easier for potential projects, such as battery or high-value component manufacturing, to stay in Mexico by leveraging installed infrastructure, a skilled workforce and stable suppliers.
- Firmness in USMCA negotiations: it sends a strong message that Mexico will not give up its gains in regional trade ahead of the treaty's reviews.
The scope limited to the Automotive Bonded Warehouse
It is essential to note that the decree's effect is selective rather than widespread across the sector. The benefit is limited exclusively to companies in the terminal automotive industry authorized to operate an Automotive Bonded Warehouse under the Customs Law and the guidelines of the Ministry of Economy.
Unlike an ordinary bonded warehouse, where goods may not change their composition or be transformed, the automotive regime (in force for more than 20 years) does allow the processing and integration of inputs to assemble vehicles. Since a substantial share of the sector's imports is currently handled through other customs schemes, the final financial impact will depend on the proportion of inputs each automaker allocates to this specific regime.
Strategic recommendations for senior management
At Baker Tilly, we suggest that automotive industry executives take the following priority actions:
- Audit the current customs structure: assess what percentage of their imports of assembly materials is or could be carried out through the Automotive Bonded Warehouse.
- Cost-benefit assessment of migration: analyze the technical feasibility of obtaining or expanding the use of this regime to take advantage of the 0% rate during its five-year term.
- Supply chain optimization: review global supply contracts to identify where removing the tariff can help absorb annual contractual savings targets.
- Preparing for a tough negotiating environment: maintain constant monitoring, as trade reviews within the USMCA will continue to require periodic strategic adjustments.
At Baker Tilly Mexico, we are ready to help automotive companies assess and leverage this tariff benefit within their foreign trade strategy.
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