Mexico is set to implement sweeping new tariffs of up to 50% on a wide range of goods from countries with which it does not hold a free trade agreement.  The proposals target 1371 product categories and appear to be largely aimed at curbing the influx of Chinese goods in order to protect and strengthen domestic industry. 

The proposed measures have been sent to the Chamber of Deputies as part of the 2026 budget proposal and seek to modify the existing Law on General Import and Export Taxes.

Strategic shift in trade policy

According to the government, the reform is a key component of ‘Plan México’, an industrial policy unveiled earlier in January this year, designed to reduce the country’s reliance on imports.

The proposal would implement duties ranging from 10% to 50% on a vast array of goods currently valued at approximately $52 billion. The affected sectors include automotive, textiles, plastics, steel, footwear, furniture, electronics, and toys.

The reform bill explicitly states that tariffs should no longer be viewed solely as a revenue-generating measure, but also as ‘strategic tools’ for economic policy.  It states: 

‘Trade liberalization, while expanding markets, did not always translate into greater technological capacity or an increase in national content in our exports. With this proposal, inspired by Plan Mexico, this trend will be corrected, and national industry will be strengthened given the international trade context and global reconfiguration’

The government aims to correct this trend by setting a goal for at least 50% of strategic supplies to be manufactured within Mexico.

It is estimated that the new tariffs could generate an additional 70 billion pesos (US$3.76 billion) in annual government revenue.  

Impact on trade with China

Though the reform proposals apply to countries without a free trade agreement with Mexico, China is expected to be most impacted by the new measures.  

The new measures have come at a time that the country is grappling with a ballooning trade deficit with China, which exceeded $57 billion in the first six months of 2025.  Additionally, Chinese imports have already doubled in the past decade to about $130 billion, while Mexican exports to China remain under $10 billion.  

Additionally, approximately 19.96% of Mexico’s total imports originate from China, with Chinese vehicles accounting for 18.1% of sales in the Mexican market.  This sector is likely to be particularly impacted by the new tariffs, with the current imports accounting for almost a third of the entire market.  

The Economy Minister Marcelo Ebrard stated that the tariffs would impact roughly 8.6% of Mexico’s total imports, and defended the measures: ‘…Every time [the deficit with China] goes up, we’ll have fewer companies in Mexico’.   

Wider geopolitical tensions at play? 

The move has also been widely interpreted as a strategic geopolitical play. 

By cracking down on Asian imports, particularly those from China, Mexico appears to be manoeuvring to appease its northern neighbours ahead of the crucial 2026 review of the United States-Mexico-Canada Agreement (USMCA), both of whom have questioned Mexico’s deepening economic ties with China.  

The US President Donald Trump has repeatedly accused Mexico of acting as a ‘transshipment hub’. Chinese firms have invested heavily in Mexican manufacturing under the practice of ‘nearshoring’, allowing them to bypass US tariffs under the USMCA by having goods labelled as Mexican-made.  

The reform proposals come as negotiations between the US and Mexico continue after Trump’s suspension of a 30% tariff on Mexican imports.   

The government has stressed that any new measures would be implemented within the framework of international treaties, ensuring that existing agreements with roughly 50 nations remain unaffected.

Reference：

https://mexiconewsdaily.com/business/sheinbaum-proposes-tariffs-1371-product-categories/

https://finance.yahoo.com/news/mexican-car-industry-fears-higher-153844324.html