Washington wants Mexico's AI hardware to use fewer Chinese parts

The United States is pressing Mexico to accept stricter rules of origin for AI hardware. The Wall Street Journal reported Tuesday that the proposal covers chips, servers and related equipment crossing the southern border. Washington wants to stop Chinese companies and other foreign suppliers from using Mexico to avoid U.S. tariffs.

The proposal follows the model used for auto trade. Under the U.S.-Mexico-Canada Agreement, vehicles need 75 percent North American content to receive preferential treatment. Washington has not disclosed the threshold it wants for AI hardware. The White House and the Office of the U.S. Trade Representative did not comment to the Journal.

The two countries announced related work in March. U.S. Trade Representative Jamieson Greer and Mexican Economy Secretary Marcelo Ebrard said their teams would examine rules of origin and economic security. They also said the teams would study ways to limit what they called non-market inputs in North American supply chains. The new proposal brings AI hardware into those talks.

Mexico exported $82.9 billion in computer servers during the first half of 2026. Reports on the proposal cited figures from S&P Global Market Intelligence.

The proposal remains under negotiation. Washington has not published a content threshold, a product list or draft legal text. The export figure describes computer servers, not only servers used for AI. Stricter origin rules would not by themselves stop every Chinese component from entering North American supply chains.

Mexico is becoming a manufacturing base for the AI buildout, while Washington wants less Chinese involvement in U.S. technology supply chains. A North American content rule could shift more assembly and component work to the United States, Mexico and Canada. Costs could rise and deliveries could slow if suppliers in the region cannot replace Chinese inputs fast enough.

Rules of origin decide whether products qualify for lower tariffs. The decision depends on where their parts come from and where workers assemble them. Applying auto-style rules to servers would put their supply chains under similar requirements.

Mexico has leverage because servers have become a major export. The United States also wants a trade deal before the November midterm elections. Mexico can push for a gradual phase-in, lower thresholds or tariff relief elsewhere. A strict rule could force companies to change suppliers. A loose rule could leave the current route in place while adding paperwork.

A written U.S. proposal would answer three open questions. Which products would the rule cover? How much North American content would they need? The text would also need to explain how officials calculate that share. It would need to say whether Chinese-owned factories in Mexico count as North American production.

The next record from the USMCA talks could show whether Mexico will accept AI hardware rules in return for relief elsewhere. That relief could cover vehicle tariffs or other disputes. Supplier announcements would offer the clearest sign that companies expect to change what they buy. Watch for changes involving chips, memory, networking gear and server parts.