Mexico has approved tariff hikes of up to 50 per cent from 2026 on import of select products from Asian countries including from India and China. The measure has been taken to protect the national industry and producers. Other countries that will be affected by the proposed higher tariffs are South Korea, Thailand, Indonesia, Brazil, South Africa and the United Arab Emirates. This move, quite similar to US President Donald Trump’s tariff measures on Asian countries, has come as a shock.
According to a report published in the Mexican news outlet El Universal, Mexico’s Senate (Upper house of Parliament) on Wednesday modified various tariff classifications of the General Import and Export Tax Law to impose duties ranging from 5 to 50 per cent on goods ranging from everyday consumer goods such as clothing, footwear, appliances, and furniture. Specifically, the order establishes tariffs on the import of various goods in the auto parts, light cars, clothing, plastics, steel, household appliances, toys, textiles, furniture, footwear, leather goods, paper and cardboard, motorcycles, aluminium, trailers, glass and soaps, perfumes and cosmetics.
Greater Impact on Non-FTA Countries
It appears that the Mexican government is aiming to reduce reliance on imports from Asian countries, especially China, the country with which Mexico has a significant trade imbalance. Tariffs would be imposed or increased on approximately 1,400 products from Asian countries. Automobiles, auto parts, clothing, footwear, plastics, steel, furniture, toys, aluminium, and glass products exported to Mexico will become more expensive. Countries that do not have a free trade agreement (FTA) with Mexico will be more significantly impacted.
Is Mexico trying to appease the US?
Mexico’s move is seen as an attempt to appease Washington as Trump has repeatedly pressured the country to distance itself from China. The US-Mexico-Canada Trade Agreement (USMCA) is up for review in 2026, and the US views Mexico as a “backdoor” entry point for Chinese goods. Like the US, Mexico is also moving towards protectionism. As per reports, this could strengthen Mexican domestic factories and save over 300,000 jobs. However, imported parts will become more expensive, potentially leading to increased inflation. Several business groups in Mexico have protested against this.
India-Mexico trade reached $11.7 billion in 2024
According to reports, trade between India and Mexico has increased in recent years. In 2022, trade between the two countries amounted to $11.4 billion, although it declined to $10.6 billion in 2023. However, it rebounded in 2024, reaching $11.7 billion, an all-time high. India also enjoys a significant trade surplus with Mexico. In 2024, India exported goods worth $8.9 billion to Mexico, while importing only $2.8 billion worth of goods.
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