The Mexican government has expressed serious concerns regarding the US Biden administration's proposal to ban Chinese software and hardware in connected vehicles due to national security concerns, reported by Reuters.

The US proposal represents a notable increase in restrictions on Chinese vehicles, software, and components.

It could effectively prohibit the import of Chinese brand vehicles into the US, even those assembled in Mexico.

This move comes in the wake of the Biden administration imposing steep tariff hikes on Chinese imports in September, including on electric vehicle (EV) batteries and essential minerals, and a 100% duty on EVs.

Mexico's Economy Ministry said in a filing with the U.S. Commerce Department that 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."

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 proposed prohibitions on software would come into effect for the 2027 model year, while the ban on hardware is set to start in the 2030 model year or by January 2029.

The Alliance for Automotive Innovation, which includes major automakers such as General Motors, Toyota Motor, Volkswagen, and Hyundai Motor, has requested at least an additional year to comply with the hardware requirements.

Similarly, the Consumer Technology Association and Honda Motor have asked for a two-year extension to allow for essential testing, validations, and contract updates.

The US Commerce Department aims to finalise the proposal by 20 January next year.

The rules would apply to all on-road vehicles, with exclusions for agricultural or mining vehicles not used on public roads, as well as drones and trains.