Introduction to Mexico’s Agricultural Vehicle Fleet
Mexico currently has an agricultural vehicle fleet consisting of 400,000 units, including tractors and motorized equipment used in farming and crop transportation.
Unusual Tire Importation
Despite a prevailing drought, 1.5 million imported tires arrived in Mexico last year, allegedly for agricultural use. This unusual purchase implies that 95% of the fieldwork units would renew their tires. The import was conducted by seven importers: five based in Marcos Castellanos, Michoacán, and the rest in Guadalajara, Jalisco.
These tires originated from China and entered the country through Manzanillo, Colima, and Mazatlán, Sinaloa. Their distribution confirmed an ongoing fraud that undermines the Mexican government’s intention to support vulnerable rural populations by exempting them from import taxes and VAT on various agricultural insumos, including tires.
Historical Context and Investigation
Three years ago, the National Rubber Industry Chamber requested an anti-dumping investigation into these imports. At that time, Raquel Buenrostro headed the Secretariat of Economy.
Industry representatives argued that Chinese tires were being sold at “unfairly low” prices, causing irreparable damage. The SE established a negotiation table with sector representatives and Chinese authorities, holding multiple meetings to discuss dumping margin calculation methods and quantifying the damages. An estimated loss of over 80 million dollars in revenue was projected.
Evidence revealed the problem’s origin: a smuggling and fraud scheme involving a Michoacán-based business group, a customs agency in Sinaloa, and several Chinese companies collaborating in document falsification.
Arbitrary Tariff and Continued Fraud
Starting April 23, 2024, a 35% tariff was imposed on these products, along with VAT, for two years. However, this measure proved insufficient.
The tire importation operation for agricultural vehicle use to evade tariff and VAT payment is evident through the agricultural tire price drop, from 350 dollars in 2022 to 38 dollars in 2024, despite inventory growth.
By January 2025, the value of these imports was estimated at 10 million dollars.
Economic Crime Network
The tire importation invasion involves a network of twenty warehouses, distribution centers, and online sales platforms. This scheme is not merely tax evasion but an economic crime network harming multiple sectors:
- The Mexican government, losing 115 million dollars in revenue (30 million from VAT, 60 million from tariff evasion, and 25 million from ISR according to recent estimates);
- Tire distributors who pay VAT and tariffs.
The annexed study identifies the Chávez-Godoy family, under Machado family supervision, as the alleged masterminds.
