Mexico approves up to 50% tariffs on China and other Asian nations
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Mexican President Claudia Sheinbaum has publicly denied any connection to the US tariff onslaught against China.
PHOTO: REUTERS
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MEXICO CITY – Mexican lawmakers gave final approval to new tariffs on Asian imports, broadly aligning with US efforts to tighten trade barriers against China.
Mexico’s Senate on Dec 10 voted in favour of the Bill, which imposes tariffs of between 5 per cent and 50 per cent on more than 1,400 products from Asian nations that do not have a trade deal with Mexico.
The new tariffs will take effect in 2026 and hit a wide range of products from clothing to metals and auto parts, with the massive output of Chinese factories emerging as the legislation’s focus.
Passage of the Bill took place against the backdrop of President Claudia Sheinbaum’s high-stakes trade talks with US President Donald Trump and pressure to match his priorities, fuelling hopes that Mexico’s tariffs on Chinese goods could ease punishing US tariffs on goods such as Mexican steel and aluminium.
While Ms Sheinbaum has publicly denied any connection to Mr Trump’s tariff onslaught against the Asian giant, the new tariffs resemble the US leader’s approach.
For decades, Mexico has embraced free trade more than nearly any other country in the Americas, inking dozens of trade deals with nations across the globe. But Ms Sheinbaum’s leftist Morena party is now moving in a different direction.
Mexico’s Finance Ministry estimates the new tariffs will raise nearly 52 billion pesos (S$3.7 billion) in extra revenue in 2026.
Manufacturers reliant on inputs made in China, India and South Korea, among others, warned of rising costs that could fan inflation. Some lawmakers, including from the ruling party, have tried to avoid a dispute with a rising region many consider crucial to the diversification of Mexican export markets.
Ms Sheinbaum’s embrace of the tariffs tracks with US concerns regarding so-called trans-shipment of Chinese exports through other countries, and follow action by Canada in 2024 to also emulate US tariffs on electric cars, steel and aluminium from China.
Chinese officials have sharply criticised the latest Mexican tariffs as unwarranted and harmful. According to the tariff legislation, Chinese cars will face among the steepest tariffs at 50 per cent.
The country’s massive auto sector currently holds 20 per cent of the Mexican market, up dramatically from minimal vehicle imports just six years ago.
Mexican officials and local auto associations backed the import tariffs in a bid to protect national vehicle production, a major driver of Mexico’s manufacturing sector. BLOOMBERG
