Trade tariffs that Mexico has started to implement are aimed at protecting the country’s manufacturing sector and gaining more control of the national trade deficit. Strengthening Mexico’s domestic industry will be a great economic benefit to the country as the negative effects of the national trade deficit will start to be mitigated. Strengthening Mexico’s trade relations with the whole of Asia will be a great economic asset to the country. The tariffs will range from 5% to 50%, with the most expensive tariffs aimed at Chinese automotive vehicles, one of the fastest-growing industries in the country.
A strategic shift in Mexico’s centre for global manufacturing
Over the preceding decades, Mexico has been one of the most trade-open economies in the Americas. This is mainly because Mexico has signed numerous trade agreements and established itself as a center for global manufacturing. Mexico’s most recent tariff agreement marks a significant change from the country’s previous position.
China is supplying Mexico with imports, as it exported $130 billion worth of goods to Mexico in the previous year. Beijing’s response was swift. On December 11, the Ministry of Commerce in Beijing warned that these tariffs would ‘significantly harm the interests’ of Mexico and its positioning in international export trade.
Bejing warns of the knock on effect to other markets beyond Mexico’s domestic market
The tariff package is also being imposed during a sensitive period in Mexico’s trading relations. Mexico’s trade relations continue to be influenced by high-level negotiations with U.S. President Donald Trump. Due to his alignment with Washington, Mexico has been pressured to support U.S. trade relations with Mexico. While the Mexican President does not claim to have direct trade coordination, the new tariffs on trade that Mexico is implementing border on protectionism.
The proposed economic tariffs have been negotiated with Asian countries, and there have been attempts to lobby proposed tariffs to Mexico’s trade relations to control the economic impact. Therefore, U.S. manufacturing concerns and supply chain control, the impact on trade relations with China, India, and South Korea has been on the U.S. tariffs. If offered tariffs impact supply chain inflation, costs are not controlled; inflation is a certainty.
The economic benefits of these tariffs are still in debate
Mexico’s proposed tariffs are expected to increase economic estimates by 52 billion pesos ($2.8 billion). Mexico’s trade relations with the U.S. continue to support the perspective that the proposed tariffs increase economic growth, however, the proposed tariffs are intended, in Mexico’s defense, to control deteriorating conditions in key economic sectors, car manufacturing. The car manufacturing sector is one of the most important sectors in the Mexican economy.
Vehicles imported from China are now approximately twenty percent of the Mexican vehicle market and are to be hit with the heaviest tariffs, equal to fifty percent. The local auto associations and the government support this policy to protect the local production of their goods and prevent foreign low-cost imported goods from distorting the market.
Future trade and the outlook on the Mexican economy hangs in the balance
The Mexican Economy Ministry was granted the authority to modify the import tariffs to accommodate border trade agreements on the goods. This can help ensure that there are no shortages of goods and that there is healthy market competition.
But the new policy is intended to benefit Mexico’s trade over the U.S. and trade over Canada ahead of the scheduled review of the USMCA trade agreement. Mexico is praised for this new policy as it gives the government the ability to refashion tariffs, as their economy adjusts to world and regional trade opportunities.
As the end of January 2026 draws closer, the new policy represents a significant moment for Mexico as it embarks on a new strategy to protect trade with its North American partners, with its Asian counterparts, and with Mexican local producers.
