Diesel engines: the US-built power inside Mexico's truck plants

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Mexico Trade Corridor · Product brief · HS 8408

Diesel engines are one of the largest goods Mexico buys from the United States, and most of them go into vehicles. This brief sets out the numbers from both sides, the rules in force, and how US sellers and Mexican buyers fund the trade.

Published October 23, 2026 · Facts as of October 23, 2026 · 10 min read · Trade data: UN Comtrade, 2020 to 2025 · Rules as of October 23, 2026

Facts as of October 23, 2026. This page states the facts as they stood on that date. Tariffs, rules and figures may have changed since publication. Tariffs and trade policy change often, so we review these pages every month and update them.

#5

Mexico's No. 5 import from the US in 2025, ranked by value as reported by Mexico (UN Comtrade, 4-digit HS codes). The US figure is shown beside it because the two countries count the same trade differently.

US$5.1bnMexico's imports from the US, 2025, as reported by Mexico

US$3.2bnThe same flow, 2025, as reported by the US

+37.2%Change 2020 to 2025, Mexico data

US$2.0bnMexico's exports to the US in the same code, 2025, Mexico data

What is it?

HS 8408 covers diesel engines, also called compression-ignition piston engines. Almost all of the trade is engines for road vehicles. Mexico reported US$5.1 billion of diesel engine imports from the US in 2025 ¹.

Why does it matter?

Diesel engines are Mexico's fifth-largest import from the US. Mexico builds heavy trucks for the US market, and each truck needs an engine, so engine supply and engine origin affect the cost of the finished truck ^1,2,11.

How does it work?

Engine makers in the US ship engines by truck or rail to vehicle plants in Mexico. Some engines move inside one company group. Others are sold to independent buyers on credit terms, which can be insured or financed ^4,15,17.

In this brief

1. How big is the diesel engine trade between Mexico and the US?
2. Which engines cross the border?
3. Who sells the engines, and who buys them?
4. How do the engines get from the plant to the buyer?
5. Which rules and tariffs apply?
6. Where do buyers and sellers need cash, and how is it financed?
7. What should diesel engine traders watch next?

01How big is the diesel engine trade between Mexico and the US?

Mexico reported US$5.1 billion of diesel engine imports from the US in 2025. That is up 37.2% from US$3.8 billion in 2020, and down 16.1% from US$6.1 billion in 2024 ¹. Diesel engines were 2.1% of Mexico's US$249.9 billion of reported imports from the US ¹. Imports peaked at US$6.2 billion in 2023.

The US figures are lower. US data shows US$3.2 billion of diesel engine exports to Mexico in 2025, so the two sides differ by US$1.9 billion. The gap was US$2.7 billion in 2023 ¹. No source we found explains it. Our data gap explainer sets out the general reasons the two countries' figures differ.

Trade also runs north. Mexico reported US$2.0 billion of diesel engine exports to the US in 2025, up 40.1% since 2020, and the US figure is almost the same ¹. On Mexico's figures, the country bought US$3.1 billion more diesel engines from the US than it sold to the US. This trade balance is a deficit for Mexico ¹.

The engines are expensive items. US customs data shows 280,565 diesel engines exported to Mexico in 2024, at an average value of US$14,949 each ¹.

Chart

Diesel engine trade, both directions, both sides of the data

• Mexico to US, Mexico data
• Mexico to US, US data
• US to Mexico, Mexico data
• US to Mexico, US data

US$ billion. Solid lines: as reported by Mexico. Dashed lines: as reported by the US. Source: UN Comtrade, 2020 to 2025.

02Which engines cross the border?

Engines for road vehicles dominate. That 6-digit line was US$5.1 billion in 2025, or 99.1% of Mexico's diesel engine imports from the US, as reported by Mexico ¹. All other diesel engine lines together were less than 1% ¹.

The northbound mix is wider. Engines for road vehicles were 85.4% of Mexico's diesel engine exports to the US in 2025, and other diesel engines 13.7% ¹.

Chart

The diesel engine lines Mexico buys from the US

US$ billion and share of the 4-digit total, 2025, as reported by Mexico. Source: UN Comtrade.

03Who sells the engines, and who buys them?

Some US engine makers belong to truck groups. Detroit, part of Daimler Truck North America, builds its DD13, DD15 and DD16 engines at Redford, Michigan, where it made its millionth engine in December 2022 ⁵. In 2020, International sourced its 12.4-liter A26 engine from its plant in Huntsville, Alabama for trucks built in Springfield, Ohio and in Escobedo, Mexico ⁴. That is 2020 information, and current sourcing should be checked with the maker.

The buyers are mainly heavy truck plants. Daimler Truck North America builds trucks in Saltillo and Santiago Tianguistenco, International in Escobedo, Nuevo León, and Paccar in Mexicali ³. Mexico's heavy vehicle makers' association, ANPACT, reported production of 138,954 units in 2025, down 34.8% ². Engine imports fell in the same year. The trucks themselves have their own brief: trucks.

Mexico also makes diesel engines. Ford's Chihuahua engine complex opened in 1983, and Ford added a diesel engine plant there in 2009 ^7,8. Cummins, an independent engine maker, added a US$11 million line in San Luis Potosí for 11-liter and 15-liter engines, with capacity of up to 2,700 engines a year, according to a 2022 report ⁶.

Mexico reported US$5.1 billion of diesel engine imports from the US in 2025, its fifth-largest import from the US.

04How do the engines get from the plant to the buyer?

Engines travel by truck or rail between the engine plant and the vehicle plant. Our guide to border crossings covers the main ports and rail lines. Vehicle plants build to a schedule, so a late engine can stop a truck line.

The Mexican buyer is the importer of record and files the customs declaration through a broker. The sale contract sets who pays for each leg and who clears customs, usually through an Incoterms rule. Mexican import duties and VAT are covered in our landed cost guide.

1. Engine plant in the USAn engine maker builds the engine to the truck maker's order, often inside the same company group.
2. PaperworkThe seller issues a commercial invoice and origin documents. A US exporter files the export record.
3. Truck or railThe engine travels south by truck or rail to the border.
4. Mexican customsThe Mexican importer's broker files the customs declaration and pays any duty and VAT.
5. Truck plant in MexicoThe engine goes into a truck, many of them built for the US market. The invoice is now due on the agreed terms.

05Which rules and tariffs apply?

US rules matter on this trade in two ways. They tax Mexican-built engines that go north, and they tax trucks built in Mexico with US or other engines.

Under US Section 232, "engines and engine parts" fall within the definition of auto parts, which have paid 25% since May 3, 2025 ⁹. Parts that qualify under USMCA are exempt until the US Commerce Department sets a process to tax their non-US content. That process was not in place as of July 15, 2026 ¹⁰. Whether each HTS 8408 line is on the parts list is not confirmed. The USMCA rules for auto parts are set out in our auto parts brief.

Medium and heavy trucks and their parts have paid 25% since November 1, 2025, under Proclamation 10984. USMCA-qualifying trucks pay on their non-US content ^10,11. The origin of the engine therefore enters the duty bill for each truck.

The 10% Section 301 tariff on Mexican goods, in force since July 24, 2026, does not apply to goods entered with a USMCA claim or to goods under Section 232 ¹². All rates here are as of October 23, 2026.

Rules in force

As of October 23, 2026. Live list: corridor watch.

Measure	What it does	Since	Status
US Section 232, auto parts	25% on listed parts; engines and engine parts are in the definition. USMCA-qualifying parts exempt until Commerce sets a process to tax non-US content 9,10	May 3, 2025	In force
HTS 8408 lines on the parts list	Whether each diesel engine line is listed under Section 232. Check each line 9	May 3, 2025	Under monthly review
US Section 232, medium and heavy trucks	25% on trucks and truck parts under Proclamation 10984. USMCA-qualifying trucks pay on non-US content 10,11	Nov 1, 2025	In force
US Section 301, forced labor	10% on Mexican goods. Exempt with a USMCA claim; goods under Section 232 excluded 12	Jul 24, 2026	In force
USMCA joint review	Agreement stays in force; annual joint reviews until 2036 unless extended 14	Jul 1, 2026	In force
EXIM charter	EXIM can approve new deals only if Congress renews its charter. No renewal passed as of Oct 23, 2026 18,19	Ends Dec 31, 2026	Renewal pending

06Where do buyers and sellers need cash, and how is it financed?

A diesel engine costs thousands of dollars, so each shipment ties up a large sum. When engine and truck plants belong to one group, payment usually runs through accounts inside the group. When the buyer is independent, the US seller decides how much credit to give.

Buyer risk is real. The US Commercial Service says many Mexican importers pay 30 to 45 days late, and that collecting from a buyer who does not pay can need travel and a lawyer ¹⁵. A seller can manage this commercial risk with credit insurance, a letter of credit or a documentary collection.

Engines are capital goods, so US export credit can help. The Export-Import Bank of the United States (EXIM) insures US sellers and guarantees bank loans. Its schedule of July 30, 2026 places no restriction on Mexico, and each case is approved on its merits ^16,17. EXIM's charter ends on December 31, 2026. If it lapses, EXIM cannot approve new deals but can service existing ones. As of October 23, 2026, we found no report that Congress had passed a renewal ^18,19. Our guide to US export credit for buyers in Mexico covers the options.

Where the cash goes

From engine order to payment

1. Order
   Engine orderThe truck plant orders engines to match its build plan. The seller agrees payment terms or asks for security.
2. Production
   Materials and laborThe US maker pays for castings, parts and wages before it ships. EXIM can guarantee a loan to fund this ¹⁷.
3. Shipment
   Freight and customsFreight and the Mexican customs broker are paid at or near the border. Duty and VAT are paid on entry.
4. Invoice
   Waiting for paymentThe buyer pays on its terms. Many Mexican importers pay 30 to 45 days late ¹⁵.
5. Payment
   Cash returnsThe seller is paid, or claims on its insurance if a covered buyer does not pay.

The order of cash needs is typical for an engine sale to an independent buyer. Sales inside one group settle through intercompany accounts.

Buyer may not payTrade credit insurance

Covers most of an unpaid invoice if a covered Mexican buyer fails to pay.

Seller wants bank securityLetters of credit

The buyer's bank undertakes to pay when the seller presents the agreed documents.

Government-backed coverECA-backed finance

An export credit agency such as EXIM insures the sale or guarantees the loan.

Seller needs cash before shipmentPre-shipment finance

Funds materials and production against a confirmed order.

07What should diesel engine traders watch next?

Heavy truck output picked up in 2026. Production in July 2026 was up 51.8% from July 2025, according to INEGI data ²⁰. USMCA stays in force, with annual joint reviews until 2036 unless the three countries confirm an extension ¹⁴. The live list of measures is on our corridor watch page.

• By Dec 2026Fourth round of US-Mexico talks on autos. No date announced as of October 18, 2026 ¹³.
• PendingCommerce process to tax the non-US content of USMCA-qualifying parts ¹⁰.
• Dec 31, 2026EXIM's charter ends unless Congress renews it ¹⁸.
• Jan 12, 2027Deadline for public comments to the US Trade Representative on the USMCA review ¹³.
• Jul 1, 2036USMCA ends on this date unless the three countries confirm an extension ¹⁴.

Questions traders ask

How large is the diesel engine trade between Mexico and the US?

Mexico reported US$5.1 billion of diesel engine imports from the US in 2025 and US$2.0 billion of exports to the US, under HS 8408. US data shows US$3.2 billion of exports to Mexico and US$2.0 billion of imports from Mexico.

Why do Mexico's and the US figures for diesel engine imports differ?

Each country records its own customs declarations, with different rules for value, origin and timing. For diesel engines going to Mexico, the two sides differed by US$1.9 billion in 2025. No public source explains this specific gap.

Who buys US diesel engines in Mexico?

Mainly heavy truck plants. Daimler Truck North America builds trucks in Saltillo and Santiago Tianguistenco, International in Escobedo and Paccar in Mexicali.

Do diesel engines pay US tariffs?

Engines count as auto parts under US Section 232, which charges 25% on listed parts. USMCA-qualifying parts are exempt until the US Commerce Department sets a process to tax non-US content. Whether each diesel engine tariff line is listed must be checked. These rules are as of October 23, 2026.

Can EXIM finance a sale of US engines to Mexico?

EXIM's July 2026 country schedule places no restriction on Mexico, and it decides each case on its merits. Its charter ends on December 31, 2026. If Congress does not renew it, EXIM cannot approve new deals but can service existing ones.

Read next

• Product briefTrucks and pickups: Mexico's US$35.8 billion export to the US
• Product briefAuto parts: the trade that crosses the Mexico-US border in both directions
• Product briefGasoline engines: a two-way trade between Mexico and US vehicle plants
• Corridor guideUS export credit for buyers in Mexico
• Corridor hubTwo sides of the same trade: why Mexico's and US data differ
• Corridor hubCorridor watch: tariffs and rules in force
• Ossiano Trade Finance GuideHow each trade finance instrument works
• GlossaryTrade finance terms in plain English

Trading diesel engines between Mexico and the US? Ossiano Capital works on trade finance in this corridor.

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Sources and notes

1. UN Comtrade, annual trade data 2020 to 2025, HS 8408, Mexico and the US as reporters. Downloaded October 2026; 2025 figures may be revised. https://comtradeplus.un.org/
2. Cluster Industrial, Industria de vehículos pesados concluye 2025 con 138,954 unidades producidas en México (ANPACT data), January 12, 2026. https://clusterindustrial.com.mx/industria-de-vehiculos-pesados-concluye-2025-con-138-954-unidades-producidas-en-mexico-y-baja-de-34-8/
3. Transport Topics, Mexican heavy-duty truck output little changed by tariffs, February 13, 2026. https://www.ttnews.com/articles/mexican-truck-output-tariffs
4. CCJ, In engine plant expansion, Navistar hints at integrated International powertrain to come, February 12, 2020. https://www.ccjdigital.com/business/article/14939279/navistar-hints-at-coming-international-integrated-powertrain
5. Truck Parts & Service, Detroit celebrates millionth engine made at Michigan plant, December 7, 2022. https://www.truckpartsandservice.com/products/supplier-updates/article/15304046/detroit-celebrates-millionth-engine-made-at-michigan-plant
6. Cluster Industrial, Cummins invierte 11 mdd en nueva línea de producción de motores en San Luis Potosí, March 24, 2022. https://clusterindustrial.com.mx/cummins-invierte-11-mdd-en-nueva-linea-de-produccion-de-motores-en-san-luis-potosi/
7. Autocosmos, Ford inaugura en Chihuahua la planta de motores diésel, November 18, 2009. https://noticias.autocosmos.com.mx/2009/11/18/ford-inaugura-en-chihuahua-la-planta-de-motores-diesel
8. Ford Authority, Ford Chihuahua Engine Complex celebrates 40th anniversary, November 24, 2023. https://fordauthority.com/2023/11/ford-chihuahua-engine-complex-celebrates-40th-anniversary
9. ST&R, More details on tariffs on cars, trucks and auto parts, April 8, 2025. https://www.strtrade.com/trade-news-resources/str-trade-report/trade-report/april/more-details-on-tariffs-on-cars-trucks-and-auto-parts
10. Baker Donelson, Automotive trade risks escalate as USMCA review, Section 232 tariffs and AD/CVD actions converge, July 15, 2026. https://www.bakerdonelson.com/automotive-trade-risks-escalate-as-usmca-review-section-232-tariffs-and-adcvd-actions-converge
11. Federal Register, International Trade Administration, Procedures for submissions by importers of medium- and heavy-duty vehicles, FR Doc. 2026-02049, February 2, 2026. https://www.govinfo.gov/content/pkg/FR-2026-02-02/pdf/2026-02049.pdf
12. EY Tax News, USTR finalizes Section 301 forced labor tariffs on 60 economies, July 2026. https://taxnews.ey.com/news/2026-1607-ustr-finalizes-section-301-forced-labor-tariffs-on-60-economies-additional-tariffs-of-10-percent-or-125-percent-take-effect-24-july-2026
13. ICPA, USMCA joint review automotive tracker, October 18, 2026. https://www.icpainc.org/usmca-joint-review-automotive/
14. White & Case, USMCA 2026 joint review: United States declines to extend agreement, July 2, 2026. https://www.whitecase.com/insight-alert/usmca-2026-joint-review-united-states-declines-extend-agreement-triggering-annual
15. US Commercial Service, Mexico Country Commercial Guide, Trade financing, February 17, 2026. https://www.trade.gov/country-commercial-guides/mexico-trade-financing
16. EXIM, Country Limitation Schedule CLS-07/26, effective July 30, 2026. https://img.exim.gov/s3fs-public/tools/countrylimitationschedule/clsjuly2026.pdf
17. EXIM, Export Finance Solutions Guide (undated). https://grow.exim.gov/hubfs/Guides/Export-Finance-Solutions-Guide-Print.pdf
18. Congressional Research Service, Export-Import Bank of the United States: Overview and Reauthorization Issues (R43581), May 7, 2026. https://www.everycrsreport.com/files/2026-05-07_R43581_367edb6d31c632f3b1d32cc175422f66d6d46a33.html
19. Legis1, Export-Import Bank reauthorization, August 21, 2026 (citing a CRS update of August 20, 2026). https://legis1.com/news/export-import-bank-reauthorization-1-faces-1
20. Transport Topics, Mexican heavy-duty truck production, exports soar in July (INEGI data), August 11, 2026. https://www.ttnews.com/articles/mexico-production-july-2026

Trade values are US dollars from UN Comtrade at the 4-digit HS level unless a 6-digit line is named. Mexico and the US record the same shipments under different rules for value, country of origin and timing, so their figures differ. Percent changes compare 2025 with 2020. All facts on this page are as of October 23, 2026, the date of publication, and may have changed since. Rules and tariffs are as of October 23, 2026 and change often: check the corridor watch before you act.

About this brief. Prepared for Ossiano Capital. People planned, researched, wrote and checked this brief, using AI tools to help with research and checking. You are welcome to quote or reuse it: please credit Ossiano Capital and link to this page.