Mexico’s lower house on Wednesday approved a sweeping tariff package that would sharply raise import and export duties on goods from China and several other Asian nations, marking one of the government’s most aggressive moves in recent years to bolster domestic industry and narrow its trade deficit.
The measure, which still requires Senate approval, passed with 281 votes in favour, 24 against and 149 abstentions.
It has already drawn criticism from China and triggered concern among Mexican industry groups over potential supply chain disruptions and cost pressures.
Under the plan, Mexico could impose tariffs of up to 50% on selected imports, while most other increases — largely capped at 35% — would be phased in through 2026.
The tariff schedule covers a broad set of sectors, including auto parts, textiles, apparel, plastics and steel.
The measures target Asian countries that do not have commercial agreements with Mexico, including China, India, South Korea, Thailand and Indonesia.
The government argues that domestic production needs support
The Economy Ministry first put forward the tariff plan in September, but despite the ruling Morena party’s majority in Congress, the proposal struggled to win broad support amid strong resistance from China and from Mexico’s industrial sector.
President Claudia Sheinbaum’s administration has argued that the tariffs are meant to strengthen domestic industry and correct what it sees as structural imbalances in Mexico’s trade relationship with China.
The version approved by the lower house departs substantially from the original draft, which stalled earlier in the fall following Beijing’s forceful objections.
Lawmakers sought to address those concerns by adopting a more flexible framework, while preserving the core objective of reinforcing tariff protections.
During a late-night legislative session, Morena legislator Claudia Selene Avila defended the revisions, insisting the higher duties would not fuel inflation.
Her remarks were aimed at easing fears that increased import costs could aggravate price pressures in an economy still wary of consumer price volatility.
Analysts see US influence and revenue motives
Though the government has pitched the policy as a domestic manufacturing initiative, analysts and leaders in the private sector said the effort also has foreign political objectives.
They say the tariffs are aimed partly at placating the United States ahead of the coming United States-Mexico-Canada Agreement (USMCA) review.
The US has noted more often that goods originating in Asia, particularly China, Vietnam and Indonesia, could gain access to the US via Mexico and Canada.
Last week, US Trade Representative Jamieson Greer criticised the practice of using North American countries as staging grounds to export products from large Asian manufacturing centres.
His comments were an illustration of the geopolitical milieu enveloping Mexico’s plans on tariffs.
Analysts also argue that the moves aim to achieve financial goals. Industry estimates put the revenue from the proposed duties at $3.76 billion next year – money that Mexico will need as it attempts to narrow its budget deficit.
Industry warns about supply chain disruptions
Mexico’s car industry, which is among the largest in the world, has emerged as one of the most outspoken opponents.
Industry experts warn that the new tariff plan may limit access to crucial imported components, such as touchscreens for digital dashboards, on which domestic manufacturers rely.
They contend that higher tariffs might boost production costs, complicate supply networks, and weaken the competitiveness of a sector critical to Mexico’s export economy.
Other businesses that rely heavily on Asian imports may face similar issues if the Senate approves the bill.
Textiles, plastics, and steel are among the products affected, affecting a wide variety of Mexico’s manufacturing industry.
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