Mexico's Senate has approved significant tariff hikes, up to 50%, on a wide range of imported products from countries with which Mexico does not have Free Trade Agreements (FTAs). This move, set to take effect from January 1, 2026, is primarily aimed at protecting Mexico's domestic industry and is seen by analysts as targeting cheap imports from China, although it heavily impacts other Asian countries, including India.
🎯 Key Details
Tariff Range: The duties will range from approximately 5% to a maximum of 50%.
Affected Products: The tariffs will apply to over 1,400 product lines across various sectors, including:
Automobiles and Auto Parts (Passenger cars could see duties jump from 20% to the maximum 50%)
Textiles and Clothing
Steel and Aluminium
Plastics
Footwear and Leather Goods
Household Appliances and Toys
Affected Countries: The measure targets all nations without an FTA with Mexico, prominently including:
China
India
South Korea
Thailand
Indonesia
Vietnam
📈 Rationale for the Tariffs
The Mexican government cites several reasons for the tariff increase:
Protecting Domestic Industry: To shield local manufacturing and jobs from what it views as excessive and often cheap import competition, particularly in sectors like steel, textiles, and autos.
Economic Policy/Revenue: To guide economic and trade policy and generate additional revenue (estimated at around $3.7 billion annually).
Geopolitical Alignment: Analysts suggest the move is also influenced by pressure from the United States to limit the flow of Chinese goods that may be transshipped through Mexico into the U.S. market, ahead of the review of the US-Mexico-Canada Agreement (USMCA).
🇮🇳 Impact on India
The new tariffs present a significant challenge for India, which currently runs a substantial trade surplus with Mexico.
Key Export Hit: India's automotive sector is a major concern, as Mexico is one of its largest car export markets. The steep rise in duty on passenger vehicles from 20% to 50% is expected to affect major Indian car exporters.
Wider Impact: Exports of auto components, engineering goods, chemicals, and textiles will also be significantly affected.
India has formally raised strong objections to the tariff hike, seeking special concessions and flagging concerns over the unilateral nature of the decision.