As President Claudia Sheinbaum works to safeguard domestic business, Mexican lawmakers finally approved higher taxes on Asian imports, largely in line with US attempts to strengthen trade barriers against China.
Mexico Imposes New Tariffs
On Wednesday, the Mexican Senate approved a measure that would levy duties ranging from 5% to 50% on over 1,400 goods from Asian countries without trade agreements with Mexico. There were 76 votes in favor of the measure, five against it, and 35 abstentions.
The vast production of Chinese factories has emerged as the legislation’s focus. The new tariffs, which will go into effect starting next year, would affect a wide range of items, including apparel, metals, and car parts.
Mexico Shifts Trade Strategy
Sheinbaum’s high-stakes trade negotiations with President Donald Trump and pressure to align with his policies coincided with the bill’s passage, raising optimism that Mexico’s charges on Chinese imports would lessen harsh US tariffs on items like Mexican steel and aluminum.
The increased import taxes are similar to the US president’s strategy, despite Sheinbaum’s public denial of any link to Trump’s own tariff assault against the Asian behemoth.
Mexico has signed scores of trade agreements with countries all over the world, embracing free trade more than almost any other nation in the Americas for decades. However, Sheinbaum’s left-leaning Morena party is currently on a different course.
Mexico Faces Tariff Pushback
According to Mexico’s finance minister, the additional taxes would increase income by around 52 billion pesos ($2.8 billion) in the upcoming year.
Sheinbaum submitted the idea to Congress in early September, but its adoption was postponed due to lobbying by Asian nations and domestic opponents, including corporate lobbyists and opposition lawmakers.
Manufacturers who depend on supplies from South Korea, China, and India, among other countries, have cautioned about growing prices that might fuel inflation. Some politicians, especially those from the ruling party, tried to steer clear of a confrontation with a developing area that many believe is essential to the expansion of Mexican export markets.
China Criticizes Mexican Tariffs
Sheinbaum’s support for the duties is in line with US worries about the alleged transshipment of Chinese goods through other nations, and it comes after Canada’s move last year to imitate US penalties on Chinese steel, aluminum, and electric vehicles.
The most recent Mexican tariffs have drawn harsh criticism from Chinese authorities who claim they are detrimental and unjustified.
Chinese automobiles will be subject to one of the highest tariffs—50%—according to the tariff law. Just six years ago, the country’s enormous car industry only imported a small number of vehicles; today, it accounts for 20% of the Mexican market.
Mexico Strengthens Trade Controls
In an effort to safeguard domestic auto production, which is a significant contributor to Mexico’s manufacturing economy, local auto groups and Mexican government supported the import taxes.
In addition to the increased duties, legislators passed a bill giving Mexico’s Economy Ministry, which is in charge of trade policy, the authority to modify import taxes as needed.
The ministry “may establish particular legislative structures and instruments for the importation of commodities from countries with whom the Mexican state does not have a free trade agreement in effect,” according to the law. The clause outlines the objective of the flexible mechanism, which is to guarantee the supply of important imports in a competitive environment.
Before next year’s review of the North American USMCA trade agreement with US and Canadian negotiators, the policy may give Mexican authorities helpful powers.
