After US, Mexico announces up to 50% tariffs on India

Mexico has imposed steep new tariffs on a wide range of Asian imports, marking a sharp break from its long-standing pro-free-trade approach — and putting India among the key exporting nations affected by the move.

In a significant policy shift, Mexico's Senate has approved a new tariff regime that raises duties, in some cases up to 50%, on more than 1,400 products imported from countries that do not have a formal trade agreement with Mexico, Reuters reported.

The list of targeted nations includes China, India, South Korea, Thailand and Indonesia.

The upper house cleared the bill with 76 votes in favour, five against and 35 abstentions, brushing aside protests from domestic industry bodies and strong objections from China. The lower house had already approved the measure.

Beginning next year and expanding through 2026, the new rates will apply to a wide swath of industrial inputs and consumer goods, including automobiles and parts, textiles, apparel, plastics, metals and footwear.

While select items will face the maximum 50 per cent duty, most products are expected to fall under the 35 per cent bracket.

Why it matters for India

India, which has sought to boost exports of textiles, auto components and engineering goods to Latin America, now faces a significantly more challenging entry into the Mexican market, the second-largest economy in the region and a key North American gateway.

Indian exporters have long leveraged Mexico as a stepping stone to the US, thanks to its integration in North American supply chains.

The tariff hikes threaten to hamper that advantage.

Several Mexican import-dependent manufacturers have warned the government that higher duties on goods from India and other Asian nations will push up production costs and stoke inflation, according to agency reports.

Implications for India and the region

For Indian exporters, the tariff shift could:

• Reduce competitiveness in industries such as textiles, leather goods, auto parts and steel.
• Push companies to reconsider supply-chain routing through Mexico.
• Increase landed costs for Indian firms operating in or supplying to North American value chains via Mexico.

India's commerce Ministry has not issued a statement yet.

Washington's shadow over Mexico's move

Analysts, including those in India tracking Latin American markets, believe Mexico's sudden protectionist turn is closely tied to pressure from the United States ahead of next year's USMCA (United States-Mexico-Canada Agreement) review.

President Claudia Sheinbaum's government is understood to be signalling alignment with Washington's tougher stance on Chinese goods, hoping this might help ease the sweeping US tariffs that have hit Mexico's own exports such as steel and aluminium.

Although Sheinbaum denied the tariffs are linked to US demands, the structure of the new duties strongly mirrors American trade actions, a Bloomberg report noted.

The version passed this week is milder than an earlier proposal, which had sought strict duties across nearly 1,400 tariff lines.

Lawmakers have now reduced the severity of tariffs on about two-thirds of those categories.

Even so, the Mexican finance ministry expects the new levies to bring in nearly 52 billion pesos (₹19,000 crore) in additional revenue next year, money the government says it needs to narrow its fiscal deficit.

Mixed reactions within Mexico

Mario Vazquez, an opposition PAN senator, said that although the tariffs may help certain sectors overwhelmed by cheaper Chinese imports, "they also act as a tax on consumers," and he questioned how the government intends to use the extra revenue.

Emmanuel Reyes of the ruling Morena party defended the bill, arguing that the measure will "strengthen Mexican products in global supply chains and protect jobs in priority sectors."

Local auto groups especially supported the move, warning that China's rapid rise — now accounting for 20 per cent of Mexico's auto market, up from almost nothing six years ago — could threaten Mexico's domestic manufacturing base.

Under the new rules, imported Chinese cars will face the steepest duty at 50 per cent.

More changes ahead

The legislation also gives Mexico's Economy Ministry sweeping authority to revise tariffs on non-FTA countries at will, enabling rapid adjustments ahead of the USMCA review.

This new flexibility could mean more fluctuations in duty structures for Indian exporters.

With the US and Canada both tightening scrutiny on Chinese supply-chain routing, Mexico's move underscores a broader North American shift toward protectionism.