With Mexico intending to slap duties amounting to 50 per cent on more than 1,400 Indian, Chinese and other Asian products, it seems like US President Donald Trump’s tariff war has triggered a domino effect.
Mexican Claudia Sheinbaum defended her administration’s budget proposal – which includes 50 per cent tariffs on Asian imports including light vehicles, auto parts, textiles, electronics, shoes, toys etc. – by saying it would counter the effects of US tariffs on Mexican products, particularly the automotive sector, which accounts for 23 per cent of Mexico’s manufacturing.
The budget, which is expected to pass easily through Mexico's Congress, where the governing party holds majorities in both chambers, is part of an attempt by the country to shore up domestic production and pass on some of the Trump administration's tariff pain.
Mexico’s Economy Secretary, Marcelo Ebrard, said Wednesday that the tariffs would be applied to 8.6 per cent of what Mexico buys abroad and apply only to countries that do not have free trade agreements with Mexico.
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“What Mexico is looking for right now are reductions or exemptions to the tariffs they're paying (to the US),” said Oscar Ocampo, a researcher at the Mexican Institute for Competitiveness.
While the listed products already have an average 16 per cent tariff, Ebrard said they would be raised to the maximum permitted by international agreements.
China will likely be the most affected, being Mexico’s second-largest trade partner after the US. In 2024, Mexico had imported USD 130 billion worth of products from the country. Other top countries to be hit by tariffs will be South Korea, Thailand, India, Philippines and Indonesia.
Meanwhile, Mexico continues trying to negotiate its way out of the tariffs imposed by the US on its imports, particularly the 25 per cent slapped on its automotive sector and 50 per cent on steel and aluminum. It is also preparing to revise its free trade agreement with the US.
As pressure mounts on the Mexican government to impose higher tariffs on its Asian trade partners, especially China, which the US alleges uses Mexico as a backdoor to the US market, it remains to be seen if new tariffs will strengthen Mexico’s hand in talks with Washington.
However, the move has been met with strong criticism from the Chinese government. Last month, Guo Jiakun, spokesman for the Chinese government, said, “China firmly opposes restrictions imposed on China under various pretexts and under coercion from others, which harm China's legitimate rights and interests”.
Sheinbaum, meanwhile, refuted the accusations, saying products like the Chinese cars are sold below market prices and that her country is simply following international trade guidelines.
Having met with US Secretary of State Marco Rubio last week in Mexico City, the Mexican President insisted the tariffs are not the result of US pressure, but rather aimed at spurring domestic production.
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