Mexico hits Asian imports with up to 50% tariffs, deals big setback for China — Will India be hit?

Mexico has passed sweeping new tariffs of up to 50% on more than 1,400 imported products from Asian countries without free-trade agreements, marking a major shift in the country’s long-standing free-trade posture and drawing immediate attention from governments across the region — including India, Reuters reported.

The move aligns Mexico more closely with US President Donald Trump’s protectionist trade strategy as both countries navigate high-stakes negotiations over industrial supply chains.

What tariffs has Mexico approved?

Mexico’s Senate on Wednesday voted to impose tariffs ranging from 5% to 50% starting next year. The new duties will apply to a wide variety of goods including:

• clothing and textiles
• metals
• machinery and industrial components
• auto parts and finished vehicles

The bill passed with 76 votes in favour, five against and 35 abstentions.

The measures are explicitly targeted at countries that do not have free-trade agreements with Mexico — a category that includes China, India, South Korea, Thailand, Indonesia and several others. The government has not yet published the complete tariff list, but early indications suggest that most Asian exporters will be subject to the levies unless covered by specific exemptions.

Mexico’s finance ministry estimates the measures will raise 52 billion pesos ($2.8 billion) in additional revenue next year.

Why is China the primary target?

Lawmakers made clear during debate that the legislation responds primarily to concerns about Chinese industrial overcapacity and rising imports across sectors such as steel, aluminium and automobiles.

According to customs data, China runs a $71 billion trade surplus with Mexico, and Chinese factories have rapidly increased their share of the Mexican auto market — now holding almost 20%, up from negligible levels only six years ago.

Chinese cars will face the maximum 50% tariff, the legislation states.

Beijing criticised the move on Thursday, with China’s Ministry of Commerce saying it “hopes Mexico will correct its erroneous practices of unilateralism and protectionism as soon as possible.” The ministry added that China would “closely monitor the implementation of the measures and assess their impact.”

Is India impacted by Mexico's new tariff regime?

India does not have a free-trade agreement with Mexico, placing it within the group of countries directly affected by the new tariff structure.

Mexican importers relying on Indian:

• machinery,
• automotive components,
• textiles,
• pharmaceuticals, and
• chemical products
• may face higher costs depending on the final tariff schedule.

While the Mexican government has not highlighted India specifically, the broad phrasing of the legislation — covering all non-FTA partners — means Indian exporters will almost certainly be affected. The scale of the impact will depend on the categories into which New Delhi’s major export lines fall.

Manufacturers in Mexico have already warned that tariffs on inputs from China, India and South Korea could raise production costs and potentially feed inflation.

How do US–Mexico negotiations factor into this?

Passage of the bill coincides with President Claudia Sheinbaum’s ongoing trade talks with President Donald Trump. Observers see Mexico’s move as an effort to address Washington’s complaints regarding the transshipment of Chinese goods through Mexico into the US market.

Some policymakers hope Mexico’s tougher stance on China will support arguments for easing the harsh US tariffs currently imposed on Mexican steel and aluminium.

Despite these parallels, Sheinbaum has denied any formal coordination with Washington. However, analysts note that the resemblance to Trump’s policies is unmistakable.

Why is the policy shift so significant?

For decades, Mexico has been one of the Western Hemisphere’s most open economies, signing more than 50 free-trade agreements globally. The new tariff policy marks a notable departure from that tradition.

The legislation also grants Mexico’s Economy Ministry new authority to adjust tariffs without requiring congressional approval. The bill states that the ministry “may implement specific legal mechanisms and instruments for the importation of goods from countries with which the Mexican state does not have a free trade agreement in force,” enabling rapid adjustments in response to market disruptions.

This flexibility is expected to be important ahead of next year’s planned review of the USMCA agreement with the United States and Canada.