Mexico Raises Tariffs Up To 50% On Imports From China, India And Asian Countries: What It Means For Global Trade

Why Mexico Is Increasing Tariffs

The Mexican Senate passed the tariff bill with a wide majority. The government says the higher duties will support domestic manufacturers, raise government revenue and reduce the flow of cheap Asian goods into the country.

According to Mexico’s finance ministry, the new tariffs are expected to generate 52 billion pesos (about $2.8 billion) in 2026.

Key Sectors Impacted

The tariffs will range from 5% to 50% and target sectors such as:

Clothing and textiles
Steel, metals and machinery
Automobiles and auto components
Electronics and industrial supplies

Chinese cars will face the highest 50% tariff. China currently holds nearly 20% of Mexico’s auto market, a sharp rise from almost zero six years ago.

What This Means for India

India does not have a Free Trade Agreement (FTA) with Mexico, so the new duties will apply fully to Indian exports. This is a major concern because Mexico had already raised tariffs on several products in April 2024.

Indian exporters warn that the latest hike may have a significant impact on:

Automobiles and auto components
Engineering goods
Steel and metal products
Ready-made garments
Chemicals, electronics and plastics

India’s exports to Mexico in FY25 stood at $5.75 billion, led by engineering goods worth $3.53 billion, followed by electronics, chemicals, pharmaceuticals, garments, plastics, spices, leather goods and gems & jewellery.

Industry groups, including EEPC India, are urging the government to begin FTA negotiations with Mexico to reduce tariff pressure. However, officials say Mexico is currently not ready to engage in trade talks.

Link to US Trade Policy

The timing of Mexico’s decision is important. President Claudia Sheinbaum is currently engaged in sensitive trade discussions with US President Donald Trump. By increasing tariffs on Asian imports, Mexico appears to be aligning itself more closely with US trade policy.

US officials and businesses have long raised concerns that cheap Chinese goods enter the US through Mexico. Canada recently took similar steps. Although Sheinbaum denies direct coordination with Washington, the decision clearly strengthens Mexico’s position ahead of the 2026 USMCA review.

Will the Tariffs Increase Costs for Mexican Industry?

Critics warn that import-dependent manufacturers may face higher production costs and inflation. Many industries rely on Asian inputs for machinery, electronics, chemicals and auto parts.

However, the government argues that stronger local industries and higher fiscal revenues outweigh short-term challenges.

Direct Answers

Why is Mexico raising import tariffs?

To protect domestic industries, generate more revenue, reduce dependence on Asian imports and align its trade stance with the US.

Which countries are affected by Mexico’s new tariffs?

China, India, South Korea, Thailand and Indonesia — all nations without a free trade agreement with Mexico.

Which products face up to 50% tariffs?

Automobiles (especially Chinese cars), auto parts, steel, metals, machinery, textiles, electronics and various industrial goods.

How will Indian exporters be affected?

Indian exports in sectors like engineering goods, autos, steel and electronics could face major losses due to higher duties.

Is India planning an FTA with Mexico?

Industry groups have requested an FTA, but Mexico has not yet agreed to start formal talks.

Conclusion

Mexico’s tariff hike marks a major shift in global trade dynamics. While it strengthens its position with the US and protects domestic industries, it will likely increase costs for importers and challenge exporters from India, China and other Asian economies. For India, the move adds urgency to exploring new trade agreements and diversifying export markets.