Mexico slaps up to 50% tariffs on 1,400+ Asian imports
What's the story
Mexico has announced a major shift in its trade policy by imposing tariffs of up to 50% on over 1,400 goods imported from Asian countries without free-trade agreements. The move aligns Mexico more closely with US President Donald Trump's protectionist trade strategy and is seen as a shift to protect domestic industries. The new tariffs will take effect from January next year.
Tariff details
Tariffs to cover a wide range of goods
The new tariffs, approved by Mexico's Senate with 76 votes in favor and five against, will cover a wide range of goods. These include clothing and textiles, metals, machinery and industrial components, auto parts and finished vehicles. The measures are specifically aimed at countries without free-trade agreements with Mexico, such as China, India, South Korea, Thailand, Indonesia, among others.
Impact on trade
Full list of tariffs or exemptions yet to be released
The new tariff regime is expected to affect most Asian exporters, including China and India. However, the Mexican government has not yet released the full list of tariffs or exemptions. Mexico's finance ministry estimates that these measures could generate an additional revenue of 52 billion pesos ($2.8 billion) next year.
Trade surplus
China's industrial overcapacity concerns
The new tariff regime is largely a response to concerns over Chinese industrial overcapacity and rising imports in sectors such as steel, aluminum, and automobiles. China has a $71 billion trade surplus with Mexico, and its factories have rapidly expanded their presence in the Mexican auto market. In fact, they now account for nearly 20% of the market share, up from almost nothing six years ago.
Tariff imposition
Chinese cars to face maximum tariff
Chinese cars will be subject to the highest tariff of 50%, according to the legislation. China's Ministry of Commerce has criticized Mexico's decision, urging it to reverse its unilateral and protectionist practices as soon as possible. The ministry also said that China would closely monitor the implementation of these measures and their effects.
Trade implications
India's trade with Mexico may be impacted
India, which does not have a free-trade agreement with Mexico, falls into the category of countries that will be directly affected by the new tariff regime. Mexican importers sourcing Indian machinery, automotive components, textiles, pharmaceuticals and chemical products could face higher costs depending on the final tariff schedule. While India has not been specifically mentioned in this legislation yet, its broad language suggests that Indian exporters are likely to be impacted.
Trade talks
US-Mexico negotiations and policy shift
The new tariff policy comes as President Claudia Sheinbaum continues trade talks with President Trump. Some policymakers hope Mexico's tougher stance on China could help make a case for easing strict US tariffs on Mexican steel and aluminum. Despite these similarities, Sheinbaum has denied any formal coordination with Washington. However, analysts note that the resemblance to Trump's policies is unmistakable.