Mexico has imposed tariffs of up to 50 percent on 1,400 products from China, India, South Korea, Thailand and Indonesia.

Mexico passed a bill that could shake up the entire landscape of exports from Asia. The Mexican Senate passed a major trade amendment bill that would impose tariffs of up to 50 percent on approximately 1,400 products from countries like China, India, South Korea, Thailand, and Indonesia. This move is similar to what US President Donald Trump has done under his protectionist policy. The bill will be implemented from 2026.

This bill's passage comes at a time when the USMCA between the United States, Mexico, and Canada is due for review in 2026. The Trump administration has consistently pressured Mexico to distance itself from China, calling it a "backdoor entry point" for China. Against this backdrop, this move is being seen as not just a trade policy but also a geopolitical strategy.

On which products will the tax increase?

The products on which the Mexican government is going to increase tariffs include:

• Automobile
• Auto Parts
• Clothes
• Shoes and slippers
• Plastic products
• Steel
• Aluminum
• Glass
• Furniture
• Toys

Many of these goods rely on Asian supply chains. For countries that don't have a free trade agreement (FTA) with Mexico, the new tariffs will make trade more expensive. Experts say this will provide relief to Mexico's domestic factories, but it could also increase inflationary pressures due to the cost of imported parts. Local business groups have already expressed their displeasure.

What is the purpose of passing the bill?

This bill moved forward very fast in the Mexican Parliament.

• December 10: Lower House approves it
• Same day: Senate also passed by a vote of 76–5

President Claudia Sheinbaum proposed this in September 2025 and now only the formality of its signing remains.

According to experts, this move also signals to the US that Mexico stands with its strategic priorities. It will boost manufacturing in Mexico and is estimated to save approximately 300,000 jobs.

What will be the impact on India-Mexico trade?

The trade relations between India and Mexico have steadily strengthened over the last few years.

This is how business grew:

• 2022: $11.4 billion
• 2023: $10.6 billion (decline)
• 2024: $11.7 billion (all-time high)

India's trade balance is also quite positive with Mexico.

• India's exports in 2024: $8.9 billion
• Imports: $2.8 billion

Clearly, India exports a significant amount of goods to Mexico. Therefore, the new tariffs could increase costs for Indian exporters, potentially impacting their competitiveness, especially in sectors where competition from Asian countries is already fierce.

Is this decision a direct challenge to Asia?

Asia has a significant share in the global supply chain. By raising tariffs, Mexico is protecting its industry while also strengthening its alliance with the United States.

Experts say Mexico is seeking to distance itself from China under US pressure. This is also a political message ahead of the USMCA review in 2026. Such a move would strengthen Mexico's domestic industry. However, rising prices of imported goods could lead to higher domestic inflation.

Since India is among the Asian economies on which tariffs have been increased, several sectors of India-Mexico trade, especially manufacturing, textiles, auto and plastics sectors, may be affected.

What might change in the future?

This decision will take effect in 2026, but its impact is already visible. It could transform the climate for new investments in Mexico for many Asian countries, including India.

The future picture will depend on these aspects:

• Would Mexico be willing to exempt certain product categories?
• Will the US impose new conditions in the 2026 review of the USMCA?
• Will India move towards a new agreement to improve the trade balance?

At present, it is certain that this decision marks the beginning of a challenging period for Asian exporters.

PC:Navjivan India