On Thursday, January 1st, Mexico announced that it would impose comprehensive tariffs on imported products, with rates reaching as high as 50%. The tariffs cover thousands of products including automobiles, steel, textiles, and more, and are expected to impact countries like China that do not have free trade agreements with Mexico. This move is seen as an important signal of Mexico further aligning its trade policies with the United States.
According to the plan released by the Mexican government, the new tariffs will apply to over 1,400 items, such as metals, automobiles, automotive parts, clothing, textiles, plastics, steel, and household appliances. Most tariffs can go up to 35%, with specific items reaching up to 50%.
The targets of these tariffs are countries that have not signed free trade agreements with Mexico, including China, India, South Korea, Thailand, and Indonesia, with China expected to bear the most significant impact.
Mexican President Claudia Sheinbaum and government officials stated that the tariff hikes aim to boost domestic production, protect employment, and address long-standing trade imbalances.
The Ministry of Economy of Mexico said, “The main purpose of this tariff adjustment is to protect around 350,000 job opportunities in sensitive industries such as footwear, textiles, clothing, steel, and automobiles, while promoting a sovereign, sustainable, and inclusive reindustrialization process.”
These tariffs are projected to generate an additional $3.76 billion in revenue for the government next year, helping Mexico reduce its fiscal deficit.
Although Mexico emphasizes that the tariffs are not targeted at specific countries, many political and trade analysts believe that these measures primarily aimed at Chinese goods are intended to appease the Trump administration in preparation for the upcoming United States-Mexico-Canada Agreement (USMCA) review.
In recent years, Chinese companies have expanded their investments in Mexico, with several Chinese automotive brands establishing production or sales points there. Washington has openly questioned whether Beijing might be using Mexico as a transit point to evade U.S. tariffs on Chinese goods.
The Mexican government is currently negotiating with the U.S. on various trade and tariff issues, including the 50% tariffs imposed by the U.S. on Mexican steel and aluminum products, as well as punitive tariffs related to fentanyl flowing into the U.S. Trump has also threatened to impose new tariffs on Mexico citing disputes over water resource allocation.
China has expressed strong dissatisfaction with these developments. The Chinese Ministry of Commerce stated that the measures will “severely harm the interests of trading partners including China” and revealed that an investigation into Mexico’s trade policies has been initiated, urging Mexico to “correct” its decision.
The United States is Mexico’s largest trading partner. With the new tariffs set to take effect, Mexico’s role in the U.S.-China trade war is experiencing a noticeable shift.