Mexico to hike tariffs on China starting Thursday

• China expected to bear the greatest impact, though Mexico insists tariffs are not directed at any specific country
• Tariffs will apply to automobiles, auto parts, textiles, clothing, plastics, and steel from countries including China, India, South Korea, Thailand, and Indonesia
• Move seen by analysts as effort to appease Trump administration ahead of USMCA trade agreement review

Mexico will implement sweeping tariff increases on imports from Asian countries without free trade agreements starting Thursday, with rates rising up to 35% on thousands of products including automobiles, auto parts, textiles, clothing, plastics, and steel. The measure primarily targets China, though it also affects India, South Korea, Thailand, and Indonesia.

The Mexican government, led by President Claudia Sheinbaum, positions the tariffs as measures to protect approximately 350,000 domestic jobs in sensitive sectors and support "sovereign, sustainable, and inclusive reindustrialization." The new levies are expected to generate $3.76 billion in additional government revenue for 2025, helping Mexico reduce its fiscal deficit.

Key products affected span critical manufacturing sectors, with automobiles and auto parts facing significant impact alongside textiles, apparel, footwear, and steel industries. The timing and scope of these measures effectively align Mexico's trade policy with U.S. restrictions on Chinese imports.

Trade analysts suggest the tariffs serve dual purposes: protecting domestic manufacturing while potentially appeasing the incoming Trump administration ahead of the U.S.-Mexico-Canada Agreement (USMCA) review. This strategic positioning comes as North American trade partners reassess their relationships with China.

The move has generated strong opposition from China and concerns from Mexican industries about rising input costs. However, Mexico's economy ministry maintains the tariffs are not targeted at specific countries but rather designed to address trade imbalances and strengthen domestic production capabilities.

This protectionist shift marks a significant change in Mexico's trade policy, potentially affecting global supply chains that rely on Mexican manufacturing as a gateway to North American markets. The implementation coincides with broader regional efforts to reduce dependence on Asian imports and bolster North American manufacturing integration.