The U.S. government has been agonizing for months now over how to prevent Chinese companies from sneaking around tariffs by building EVs in Mexico. For America’s southern neighbor, that means a tightrope walk as it finds itself becoming a battlefield in the trade war between superpowers.

 

Products made in China are subject to big import costs when they try to enter the U.S. market. For EVs, there is a 27.5 percent tariff, which makes China-built EVs uncompetitive. As a result, automakers like BYD have been looking to build plants in Mexico, which has favorable trade deals with the U.S.A.