Since a certain moment, it seems that the whole world is uniting to confront the Chinese Communist regime. Mexico has recently joined the ranks of the United States and the European Union in resisting trade with China, planning to impose tariffs on products manufactured in China.
Undoubtedly, pressure from Washington has played a role in the decision-making in Mexico City, but leaders in the Mexican political and business circles also strongly desire to protect domestic industries. Regardless of Mexico’s motives, the significant decision to decouple from trade with China carries weight. Mexico not only boasts a substantial economic presence but also serves as a pathway for Chinese manufacturers to enter the United States through Mexico to circumvent U.S. tariffs. Mexico’s decoupling decision is sufficient to raise concerns in Beijing.
The tariffs announced by Mexico City do not solely target the Chinese regime. They simply mention raising tariffs on countries that have not signed clear trade agreements with Mexico, a category that naturally includes China. To emphasize this, the official statement mentions the need to “strengthen domestic industries and substitute imports from Asia.”
Mexico’s tariff plan is part of the 2026 budget proposal recently submitted to the Mexican Congress. According to the Economics Ministry of Mexico, the plan will impact around 1,500 products with an import value of about $52 billion. Mexican officials anticipate no objections from the World Trade Organization (WTO) as the proposed tariffs fall within the limits allowed by the WTO for such levies.
Imported goods affected include automobiles, auto parts, steel, textiles, toys, appliances, and footwear, all part of the many products shipped from China to Mexico. Of particular significance are the automobiles manufactured in China. Marcelo Ebrard, the Mexican Secretary of Economy, stated that Chinese-made cars account for one-fifth of new car sales in Mexico. The domestic automotive industry in Mexico comprises a quarter of the country’s manufacturing sector and warrants protection from competition by the Chinese regime. Ebrard indicated that, overall, these tariffs will safeguard up to 320,000 domestic industrial jobs.
Mexico’s actions alone will draw Beijing’s attention, but considerations from the United States are vital for both Mexico and China. Mexican Finance Minister, Edgar Amador, publicly stated that the new tariff proposal partly targets Mexico’s ongoing trade negotiations with Canada and the United States.
In the past, Mexico has been a conduit for Chinese goods entering the United States, helping Chinese goods evade U.S. tariffs on direct imports from China. Chinese manufacturers ship finished and semi-finished products to Mexico, which then enter the U.S. market labeled as Mexican products. Many Chinese companies have businesses in Mexico for this purpose. Washington has warned Mexico that if it cooperates with such actions benefiting the Chinese regime, tariffs will be imposed on Mexico. Undoubtedly, Mexican officials view the proposed tariffs as a measure to soften Washington’s stance on this matter.
Given the situation’s Washington link, it appears more critical to Beijing. Beijing has formally warned Mexico City, essentially requesting Mexico to reconsider the tariff proposal. Beijing categorizes Washington’s tariffs as “unilateral bullying” and labels Mexico’s tariffs as “due to coercion.” Therefore, Beijing threatens that if Mexico incorporates the proposed tariffs into its 2026 budget, retaliatory measures will be taken. Beijing has been vague about the nature of retaliation thus far, but if Mexico continues to push forward with the plan, Beijing is unlikely to remain indifferent. This passive attitude will encourage the U.S. to pressure other countries on trade with China and prompt other countries to follow suit.
Because Mexico genuinely cares about protecting its domestic manufacturing and values its relationship with the United States over China, these tariff proposals are likely to become Mexican law. These proposals undoubtedly will garner support from the Trump administration and force Beijing to respond. While Beijing’s response remains murky in nature, potential actions by the Chinese regime may include reducing investment flows from China to Mexico, imposing tariffs on products imported from China through Mexico, and setting up other administrative barriers to make Mexican manufacturers dealing with China more uneasy. Thus, Beijing’s response to this matter, regardless of the specific details, is not aimed at altering Mexico’s decision afterward but rather at warning other countries globally.
We have omitted the original author’s information for brevity and clarity.