Mexico Approves Tariff Hikes: Congress Imposes Up to 50% Duties on Asian Imports to Protect Domestic Industries
London-UK, December 12, 2025
Mexico Approves Tariff Hikes: A Major Shift Toward Protectionism
In a decisive move that signals a significant shift toward trade protectionism in North America, Mexico’s Congress has officially approved a comprehensive package of Tariff Hikes, allowing the government to impose duties of up to 50% on Asian Imports.
The legislation, passed by Mexico’s lower house and slated to take effect on January 1, 2026, targets imports from non-free trade agreement countries, including China, India, South Korea, Thailand, and Indonesia.
This bold action is intended by President Claudia Sheinbaum’s administration to Protect Domestic Industries from what is deemed unfair competition, while also serving dual geopolitical and fiscal objectives:
aligning Mexico with US trade policy and generating much-needed government revenue.
The new tariffs cover a vast array of over 1,400 products, with duties ranging from 5% to the maximum of 50%.
The most affected sectors include automobiles and auto parts, textiles, steel, aluminium, plastics, and machinery. While the majority of affected items face hikes of up to 35%, selected critical categories will be hit with the full 50% levy.
The economic impact is projected to be substantial, with the Finance Ministry anticipating the tariffs will generate approximately $2.8 billion in additional revenue next year, helping to narrow Mexico’s widening fiscal deficit.
However, the move has drawn sharp criticism from the Chinese Ministry of Commerce, which denounced the tariffs as “unjustified and harmful,” warning of potential damage to long-term commercial relations.
Headlines Points
Massive Tariff Escalation:
Mexico has approved Tariff Hikes of 5% to 50% Duties on Asian Imports from countries including China, India, and South Korea, effective January 2026.
Domestic Industry Protection:
The primary goal is to Protect Domestic Industries—especially steel, automotive, and textiles—from what the government calls a surge of cheap imports.
USMCA Compliance:
Analysts suggest the move is partly aimed at placating the United States ahead of the critical review of the United States-Mexico-Canada Agreement (USMCA).
Trade War Fallout:
The tariffs follow similar protectionist actions by the US, highlighting a global trend toward trade friction and away from open market principles.
Fiscal Goal:
The tariffs are expected to generate an estimated $2.8 billion in additional government revenue, helping to mitigate Mexico’s growing fiscal deficit.
Geopolitical and Trade Alignment
Beyond protecting local jobs, the tariff decision is steeped in geopolitical significance. The United States, Mexico’s largest trading partner and a co-signatory of the USMCA, has long pressured its neighbours to limit economic dependency on China.
Mexico’s tariff escalation, while formally applied across a range of Asian nations, is widely interpreted as a direct response to this pressure and an effort to solidify its position as North America’s preferred manufacturing hub.
By making imports from non-USMCA Asian countries significantly more expensive, Mexico hopes to incentivize nearshoring—the relocation of manufacturing and supply chains from Asia to Mexico—thereby strengthening its own industrial base and deepening integration with the US economy.
For countries like India, the tariffs create new headwinds, particularly for exporters in the automotive and machinery sectors.
Indian exports to Mexico had previously shown robust growth, but the new duties threaten to stifle this trade.
For China, which is already engaged in escalating trade tensions with the US, the tariffs represent a new economic barrier to its second-largest trading partner in Latin America.
The global trend towards protectionism is clearly visible here;
the decision underscores a growing willingness by major economies to utilize trade barriers as tools of both economic defense and geopolitical leverage.
Economic Costs and Consequences
While the government touts the protective and fiscal benefits, the tariffs carry significant economic risks.
Critics argue that higher duties on essential inputs like steel, chemicals, and auto components will inevitably raise manufacturing costs for Mexican producers, thereby fueling domestic inflation.
  This could undermine the competitiveness of Mexico’s own exports and place a heavy burden on consumers.
The move also complicates Mexico’s relationship with Asian trading partners, many of whom are members of important regional blocs.
The potential for retaliatory tariffs from countries like China and India looms large, which could negatively impact key Mexican export sectors.
The government must now walk a fine line:
generating revenue and attracting US-aligned investment while avoiding a destabilizing regional trade war.
This strategic pivot marks a defining moment for Mexico’s trade policy, prioritizing regional integration and domestic industrial strength over multilateral trade openness.
