Mexico Follows Donald Trump, All Set To Slap Up To 50% Tariffs On Indian Imports – Here’s What We Know

Mexico has upped the ante to protect its domestic manufactures from the exports mainly from Asian economies, including India and China. In a recent move, the Mexican Senate on Wednesday (local time) approved a plan to raise tariffs on Indian and Chinese imported goods by up to 50 per cent. 

The Senate went ahead with the plan despite opposition from business groups and affected governments.

Tariffs Upto 50% From 2026

The proposal, passed earlier by the lower house, will raise or impose new duties of up to 50% from 2026 on certain goods such as autos, auto parts, textiles, clothing, plastics and steel from countries without trade deals with Mexico, including China, India, South Korea, Thailand and Indonesia. The majority of products will face tariffs of up to 35%.

The Senate approved the bill with 76 votes in favor, five against, and 35 abstentions, despite opposition from China and domestic business groups.

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The approved bill is less stringent than an earlier version that stalled in the lower house this autumn, with about 1,400 tariff lines — mostly textiles, apparel, steel, auto parts, plastics and footwear. The legislation now reduces duties on roughly two-thirds of them compared with the original proposal.

Tariff Bill Aimed At Appeasing Donald Trump?

Analysts and the private sector argue the move is aimed at appeasing the U.S. ahead of the next review of the United States-Mexico-Canada trade agreement (USMCA), and say it is also intended to generate $3.76 billion in additional revenue next year as Mexico seeks to reduce its fiscal deficit.

“On the one hand, it protects certain local productive sectors that are at a disadvantage with respect to Chinese products. It also protects jobs,” said Mario Vazquez, a senator for the opposition PAN party.

“But, on the other hand, (…) the tariff is an additional tax that citizens pay when they buy a product. And these are resources that go to the state. We would need to know what they are going to be used for. Hopefully, production chains in the country will be strengthened,” Vazquez added.

Emmanuel Reyes, a senator from the ruling Morena party, defended the measure.

“These adjustments will boost Mexican products in global supply chains and protect jobs in key sectors,” said Reyes, who is also chairman of the Senate Economy Committee.

“This is not merely a revenue-raising tool, but rather a means of guiding economic and trade policy in the interest of general welfare,” he added.

Mexico Facing USMCA Review

Looming over Mexico’s sweeping tariff proposal is next year’s USMCA review. Earlier this year, Mexico stepped up tariffs on Chinese goods in what analysts said was an effort to placate Washington. But U.S. officials continue to raise concerns.

China’s commerce ministry did not immediately respond to a request for comment.

(With inputs from Reuters)

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