Mexico Approves Higher Tariffs on Imports from India, China

Mexico City: Mexico's Congress has approved a bill imposing higher tariffs on imports from countries without free trade agreements, including India, China, Brazil, South Korea, Thailand, Indonesia, South Africa, and the UAE. The tariffs, ranging from 5 to 50 per cent, will cover 1,463 product categories across sectors such as auto parts, light vehicles, plastics, toys, textiles, furniture, clothing, aluminium, and glass. The measure, submitted by President Claudia Sheinbaum in September, will take effect on January 1, 2026.

The government expects the new levies to generate an additional USD 3.8 billion annually and aims to reduce dependence on Asian imports, particularly from China. Mexican officials described the move as aligned with US trade policy, citing shared concerns about practices affecting national industries, especially textiles and manufacturing.

India, Mexico’s ninth-largest trading partner in 2023, recorded bilateral trade of USD 10.58 billion, with Indian exports to Mexico at USD 8.03 billion, mainly automobiles, auto parts, pharmaceuticals, engineering goods, and chemicals. Mexico’s exports to India, valued at USD 2.54 billion, primarily include crude oil, gold and jewellery, chemical compounds, and telephone machinery. China is expected to be the most affected by the tariffs, highlighting Mexico’s strategic shift to diversify trade and protect domestic industries.

This move marks a significant recalibration of Mexico’s trade policy, reflecting growing regional alignment with the US and a focus on self-reliance in manufacturing.