Mexico is preparing to impose higher tariffs on Chinese imports — including automobiles, textiles, and plastics — as part of its 2026 budget proposal, Bloomberg reported on Thursday.
The measure, expected to be presented to Congress next month, would represent one of the country’s most significant trade shifts in recent years.
Trump’s North America Strategy
The plan comes amid U.S. pressure to reduce reliance on Chinese supply chains, a central pillar of President Donald Trump’s “Fortress North America” strategy.
Washington has long criticised what it sees as loopholes in the U.S.-Mexico-Canada Agreement (USMCA), which allow Chinese goods to reach the American market through Mexico.
Trump has been particularly vocal about Chinese carmakers building massive plants in Mexico to export vehicles northward, warning during last year’s election campaign that such moves would trigger tariffs as high as 250%.
Mexico imported more than $51 billion worth of goods from China in 2024, accounting for nearly 20% of its total purchases abroad.
This surge has made Mexico China’s biggest overseas vehicle market, but has also fueled complaints from local manufacturers, who say they cannot compete against heavily subsidised Chinese goods.
While China is the main target, officials have suggested that tariff hikes could extend to other Asian exporters.
‘Plan Mexico’
The proposal, according to three sources cited by Bloomberg, is part of “Plan Mexico” — a broader government strategy to expand industrial parks, channel public investment into manufacturing, and close budget gaps.
This follows earlier measures aimed at curbing Chinese e-commerce.
In January, Mexico imposed a 19% tax on low-value parcels from platforms like Shein and Temu, later raising it to 33.5% in July.
Authorities framed these steps as both a response to U.S. concerns about cheap imports flooding North America and a way to close customs loopholes.
Mexico is also seeking new revenue sources after its budget deficit reached 5.9% of GDP in 2024, the highest in over three decades.
The final tariff details are still being negotiated, and figures may change before the budget is submitted on September 8.
China Condemns
China has already condemned the move. At a press briefing in Beijing, Foreign Ministry spokesperson Guo Jiakun said the government “firmly opposes coercive measures taken under any pretext to constrain China or undermine its legitimate rights and interests.”
Guo added that Beijing expects Mexico to “act independently and handle relevant matters properly,” stressing that China supports “inclusive globalisation” and rejects unilateral or protectionist trade measures.
Mexican lawmakers are set to debate the budget through the autumn, with industries and consumers awaiting clarity on how far Mexico will go in reshaping its trade relationship with China.
(With inputs from IBNS)
