US Pushes to Limit Chinese Components in Mexico-Made AI Equipment

The United States is advancing plans to restrict the use of Chinese-made components in artificial intelligence (AI) servers and semiconductors produced in Mexico. Similar to automotive rules requiring a certain percentage of parts sourced from North America for tariff-free benefits, the move aims to block circumvention of tariffs through Mexican assembly.

According to the Wall Street Journal, the US is pushing for restrictions on the proportion of non-North American components, including Chinese parts, in AI equipment made in Mexico as part of USMCA renegotiation talks. The proposal would extend automotive-origin rules to AI hardware, though specific North American component ratios and implementation timelines remain undetermined.

The move targets circumvention tactics where Chinese goods are assembled in Mexico for U.S. export, a practice that has surged as Mexico has become a key production hub for the U.S. AI industry. S&P Global reports that Mexican exports of computer servers for AI data centers rose over 170% year-on-year to $8.3 billion in the first half of this year, with 94% bound for the United States.

Following U.S. tariffs on Chinese products, electronics manufacturers like Taiwan's Foxconn have leveraged Mexican production facilities to supply parts to the U.S., a practice that would require adjustment under new rules to maintain tariff-free status.