Mexico has introduced plans for a sweeping tariff increase that would sharply raise duties on cars and other imports from China and several Asian economies. The proposal, announced on 11 September 2025, comes amid heightened trade pressures from the United States government and growing concerns about the industrial competitiveness of Mexico.
Tariff Proposal of the Mexican Government
The Mexican government has introduced a draft bill in Congress that would impose a 50 percent tariff on imported vehicles from China. Take note that current import duties range between 15 and 20 percent. This makes the proposed measure a dramatic increase to the maximum rate permitted under the regulations of the World Trade Organization.
Over 1400 additional imported product categories from countries with which Mexico has no free trade agreements are also targeted by the same draft legislation. The affected imports, valued at approximately USD 50 billion, cover a wide range of industrial and consumer goods. Specific sectors listed in the proposal include steel, toys, textiles, and motorcycles.
The tariffs for the aforesaid imported products or product categories are expected to increase from 10 percent to 50 percent. The specific rate depends on the classification. Other countries likely to be affected are South Korea, India, Indonesia, Russia, Thailand, and Turkey. All of these countries export sizeable amounts of products to Mexico.
Central to the imposition of the higher tariffs is the need to safeguard domestic employment and strengthen national production capacity. The Economy Ministry of Mexico estimated that more than 325000 jobs in the industrial and manufacturing sectors are potentially threatened by surging imports from lower-cost producers and exporters such as China.
The political feasibility of the bill is considered high. The political party of Mexican President Claudia Sheinbaum commands a significant majority in the Congress of the Union. This makes the likelihood of approval probable. The timing is also crucial. The United States-Mexico-Canada Agreement is scheduled for review in the upcoming year.
United States Influence and Strategic Concerns
The initiative has been closely linked to lobbying efforts by the United States government. The second Trump administration has pressed Mexico to restrict Chinese industrial expansion within its territory. This comes from fears that Mexico could be used as a backdoor route for imported Chinese products to bypass American tariff protections.
Chinese access to the American market has been limited through indirect channels. Mexico has privileged access to U.S. consumers under the trilateral trade accord. Hence, to prevent Chinese importers from exploiting this loophole, the U.S. is enacting measures preventing the re-export of products into North America through assembly or transshipment.
The reliance of Mexico on U.S. trade creates a delicate balancing act. Aligning too closely with the U.S. government risks straining relations with the Chinese government, but failure to act could complicate negotiations during the 2026 review of the trade agreement. Mexico is essentially under substantial pressure to demonstrate cooperation.
China reacted sharply to the proposal. Foreign Ministry spokesperson Lin Jian stated that their government firmly opposes any coercion by others to impose restrictions on China under various pretexts. Officials further argued that the measures undermine the legitimate rights of China and harm fair economic cooperation between the two nations.
Nevertheless, for Mexican consumers, the consequence of the proposal would be higher retail prices for vehicles and other imported products. It is possible that inflationary pressures may intensify, although local manufacturers and assembly plants are expected to benefit from reduced exposure to low-cost competitors in several strategically sensitive sectors.