America has already imposed a heavy tariff of 50 percent on the import of Indian goods. 25 percent of this tariff was imposed as a penalty on India’s purchase of oil from Russia. Now, Mexico has also announced to impose 50 percent tariff on goods from many Asian countries including India. The Mexican Senate approved this move. Mexico’s objective in raising these tariffs is to strengthen its domestic industries. Mexico’s decision will impose up to 50 percent tariffs on cars, auto parts, textiles, clothing, plastics and steel. In addition, tariffs on most other goods could be increased by up to 35 percent. The previous proposal included tariffs on 1,400 items. However, the proposal approved by the Senate is slightly less stringent than an earlier draft, which proposed raising tariffs on about 1,400 import lines. The new proposal reduces taxes on two-thirds of these items. The move was notably taken despite opposition from China and local business groups, signaling a change in Mexico’s trade policy as it faces the upcoming review of the United States-Mexico-Canada Agreement (USMCA), which will begin on July 1, 2026. What is USMCA? The USMCA is a free trade agreement between the United States, Mexico and Canada, which entered into force on July 1, 2020. According to article 34.7 of the agreement, it must be reviewed every six years to ensure that it remains beneficial for all three countries. If the review is successful, it could be extended until 2036. Less pressure on local industries The Mexican government says that this move will strengthen domestic industries by reducing the pressure on local companies from cheap imports. However, it will be a big blow to exporters and local business groups from those countries, who did not expect such a large increase in tariffs. An increase in Mexican tariffs would significantly increase the cost of imports. This will especially affect those countries that have no trade agreement with Mexico, such as China, India, South Korea, Thailand and Indonesia. Share this story Tags