MEXICO CITY—Mexico has approved a sweeping tariff overhaul, dramatically increasing import duties by up to 50% on over 1,400 products from countries with which it lacks a free trade agreement (FTA). The Mexican Senate passed the measure with a strong majority, signaling a significant shift toward protectionist trade policies.
The new tariff structure primarily targets Asian economies, including India, China, South Korea, Thailand, and Indonesia.
Details of the Tariffs
- Effective Date: The revised tariffs will take effect in 2025 and expand through 2026.
- Targeted Products: The duties cover a broad range of industrial inputs and consumer goods, including:
- Automobiles and auto parts (imported Chinese cars will face the maximum 50% duty).
- Textiles
- Metals
- Plastics
- Footwear
- Machinery
- Duty Levels: While the highest duty will reach 50%, most items are expected to fall under the 35% bracket.
- Revenue Goal: The government anticipates generating nearly 52 billion pesos (approximately ₹19,000 crore) in additional revenue next year, which will help offset the country’s fiscal deficit.
Impact on India’s Exports
The new duties create a tougher entry point for Indian exporters aiming to expand sales of textiles, engineering goods, and auto components into Mexico, which serves as a strategic gateway to the U.S. market. Indian exporters face concerns over increased landed costs, reduced competitiveness, and disruptions in supply-chain routing.
Political Drivers
While Mexican President Claudia Sheinbaum denies any direct link to the U.S., analysts believe the tariffs reflect mounting U.S. pressure on Mexico ahead of next year’s review of the US-Mexico-Canada (USMCA) trade agreement. The move is seen as mirroring recent U.S. actions to tighten measures against Chinese goods.
The new legislation grants Mexico’s Economy Ministry broad powers to revise tariffs on non-FTA nations, suggesting that the country is aligning itself more closely with North America’s shift toward stricter trade protectionism.
