In a dramatic departure from its decades-long open-trade stance, Mexico has approved sweeping new tariffs on imports from several Asian countries — including India — a move that could significantly reshape supply chains across North America.
The Mexican Senate this week passed a new tariff framework that imposes duties of up to 50% on more than 1,400 products originating from nations with which Mexico has no formal trade agreement, according to Reuters. The bill was cleared with 76 votes in favour, while five opposed and 35 abstained, despite objections from domestic industry groups and strong resistance from China.
The lower house had already approved the measure, paving the way for the new tariffs to take effect gradually from early next year and expand through 2026.
What the new tariffs cover
A broad range of industrial and consumer goods will now face higher duties, including:
-
Automobiles and auto parts
-
Textiles and apparel
-
Footwear
-
Plastics
-
Steel and various metal products
While a select set of goods will attract the maximum 50% duty, most items will fall under the 35% tariff band.
Impact on India
India — which has aggressively pushed exports of textiles, engineering goods, auto components, metals and chemicals to Latin America — is expected to feel the impact immediately.
Mexico is the region’s second-largest economy and a crucial manufacturing hub integrated with the United States through advanced North American supply chains. Indian exporters often use Mexico as a springboard to the U.S. market due to Mexico’s proximity and logistical advantages.
The tariff hike could:
-
Erode India’s price competitiveness in key sectors
-
Force firms to rethink Mexico-centric supply chains
-
Increase costs for Indian companies operating within NAFTA/USMCA-linked networks
-
Slow down India’s export growth to Latin America
Reports from Mexican industry warn that the new duties may elevate production costs and worsen inflationary pressures in Mexico’s manufacturing sector.
U.S. Pressure Seen as a Key Driver
Trade analysts believe the sudden protectionist shift is closely aligned with the United States’ escalating scrutiny of Chinese supply chains ahead of the 2026 USMCA review.
President Claudia Sheinbaum’s administration is seen as signalling cooperation with Washington’s tougher trade stance on China, possibly in hopes of easing U.S. tariffs on Mexican steel, aluminium and other exports.
Although Sheinbaum publicly denies U.S. influence, experts point out that the tariff structure mirrors American trade actions. Lawmakers toned down an earlier draft that envisioned sweeping strict duties across all 1,400 tariff lines, though two-thirds of those categories still face higher charges.
Mexico’s finance ministry expects the new tariffs to generate 52 billion pesos (₹19,000 crore) in additional revenue next year, citing a need to contain the fiscal deficit.
Mixed Reactions Inside Mexico
Opposition senator Mario Vazquez warned that while the duties may protect some domestic industries from surging Chinese imports, they effectively become a “tax on consumers.” He also questioned the government’s plans for the extra revenue.
Supporters of the bill, including Morena party lawmaker Emmanuel Reyes, argue that the policy will strengthen Mexican competitiveness in global supply chains and safeguard jobs in strategic sectors.
The auto industry has especially backed the move, as China’s share in Mexico’s passenger vehicle market has surged to 20% from almost zero in just six years. Under the new rules, Chinese vehicles face the maximum 50% duty — the steepest penalty in the new framework.
More Changes Likely Ahead
The legislation also grants Mexico’s Economy Ministry the power to modify tariffs on non-FTA nations whenever needed. This flexibility is expected to help Mexico manoeuvre ahead of the USMCA review — but also suggests greater volatility for exporters from India and other Asian countries.
With the U.S. and Canada also tightening controls on Chinese routing through Mexico, the move signals a broader North American trend toward protectionism.