Mexico Imposes 50% Tariffs on Asian Imports: $1 Billion Indian Exports at Risk

Mexico has approved significant tariffs of up to 50 percent on imports from several Asian nations, including India and China. This decision comes just four months after the United States imposed similar 50 percent tariffs on most goods from India.

These protective levies, designed to shield Mexico's national industry and producers, will take effect from January 1, 2026. The tariffs will target a wide range of products including automotive parts, light vehicles, apparel, plastics, steel products, household appliances, toys, textiles, furniture, footwear, leather goods, paper products, cardboard, motorcycles, aluminum items, trailers, glass, soaps, perfumes, and cosmetics, according to Mexican newspaper El Universal.

Nations without established trade agreements with Mexico will feel the impact, particularly India, South Korea, China, Thailand, and Indonesia.

The Mexican government's strategy aims to decrease dependence on Asian imports, with special focus on reducing its significant trade imbalance with China. In response, China has expressed opposition to "unilateral tariff hikes in all forms" and has urged Mexico to "correct its wrong practices of unilateralism and protectionism at an early date."

China stands to be most severely affected, as Mexico imported approximately $130 billion worth of Chinese products in 2024.

Beyond addressing trade imbalances, these tariffs are projected to generate additional revenue of US $3.8 billion (approximately Rs 33,910 crore) for Mexico. President Claudia Sheinbaum's administration seeks to strengthen protection for domestic industries and boost local production.

"We believe that supporting [Mexican] industry is to create jobs," stated Deputy Ricardo Monreal, Morena's leader in the Chamber of Deputies, as reported by mexiconewsdaily.com.

However, analysts from Mexican economic news outlet El Financier suggest these tariffs may also be intended to appease the United States ahead of the upcoming United States-Mexico-Canada trade agreement review.

For India, the impact will be substantial, with approximately $1 billion worth of exports affected. Major Indian car exporters including Volkswagen, Hyundai, Nissan, and Maruti Suzuki will face significant challenges as import duties on vehicles increase from 20% to 50%.

"The proposed tariff hike is expected to have a direct impact on Indian automobile exports to Mexico...we seek Government of India's support to kindly engage with the Mexican government," stated an industry body in their letter to India's commerce ministry before the tariff was finalized.

Mexico currently ranks as India's third-largest automotive export market, following South Africa and Saudi Arabia.