Four months after the United States imposed sweeping 50 per cent tariffs on most Indian goods, a new protectionist wave is building in North America. Mexico has approved tariffs of up to 50 per cent on select imports from Asian nations—including India and China—marking a significant shift in trade policy set to take effect from January 1, 2026.
According to reports from the Mexican daily El Universal, the new duties target a wide range of sectors critical to Asian exporters. The list includes auto parts, light cars, clothing, plastics, steel, household appliances, toys, textiles, furniture, footwear, leather goods, paper, cardboard, motorcycles, aluminium, trailers, glass, soaps, perfumes, and cosmetics. Countries without existing trade agreements with Mexico—specifically India, South Korea, China, Thailand, and Indonesia—will bear the brunt of these measures.
The Mexican government frames the move as an effort to reduce reliance on Asian imports, particularly from China, with which it runs a substantial trade deficit. Mexico imported approximately $130 billion worth of Chinese goods in 2024 alone. The tariffs are also projected to generate an additional $3.8 billion in revenue while shielding domestic industries.
“We believe that supporting [Mexican] industry is to create jobs,” stated Deputy Ricardo Monreal, leader of the ruling Morena party in the Chamber of Deputies, reflecting the administration’s focus on boosting local manufacturing and employment.
However, analysts from outlets like El Financiero suggest an underlying geopolitical motive: the tariffs may be designed to appease the United States ahead of the scheduled review of the United States-Mexico-Canada Agreement (USMCA), by aligning more closely with U.S. trade policy objectives and reducing Asian competition in key sectors.
China has already issued a strong rebuke. A Chinese government spokesperson stated that Beijing “has always opposed unilateral tariff hikes in all forms” and urged Mexico to “correct its wrong practices of unilateralism and protectionism at an early date.” This sets the stage for potential trade tensions between two of the world’s largest manufacturing hubs.
For India, the impact is particularly acute in the automotive sector. Mexico is India’s third-largest car export market, trailing only South Africa and Saudi Arabia. The new policy will affect an estimated $1 billion worth of shipments from major Indian exporters like Volkswagen, Hyundai, Nissan, and Maruti Suzuki.
The import duty on cars will jump from 20 per cent to 50 per cent—a staggering increase that threatens to undermine a key growth market for India’s automobile industry. In anticipation of the decision, Indian industry bodies had appealed to the government for urgent diplomatic engagement with Mexico, seeking intervention to mitigate the damage.
Mexico’s decision reflects a broader global trend toward economic nationalism and supply chain reshoring, accelerated by geopolitical tensions and pandemic-era disruptions. For Asian exporters, it signals the closing of another major market through targeted protectionism, forcing a strategic rethink of trade diversification and localised production.
As the January 2026 implementation date approaches, affected nations are likely to intensify diplomatic and economic negotiations. For India, the challenge is twofold: navigating the fallout from U.S. tariffs while now confronting new barriers in a crucial North American market. The coming months will test the resilience of global trade frameworks and the ability of emerging economies to adapt to an increasingly fragmented international trade landscape.
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