Strategic Positioning: Mexican Legislature Passes Trump-Level Tariffs Against Chinese Textiles, Shoes, Appliances and Autos
Taking a very significant step to be in alignment with President Trump’s North American trade bloc construct, Mexico has passed a sweeping set of tariffs against Chinese imports.
The motive for the move by President Claudia Sheinbaum and her political party, Morena, which controls both legislative chambers is clear. Mexico is moving into direct alignment with President Trump as the likelihood for the end of the current USMCA trade agreement looms.
President Trump has sent clear signals expressing his intent to dissolve the USMCA trade agreement in favor of two bilateral agreements, one with Mexico and one with Canada.
The Mexican government led by Sheinbaum have made moves throughout the year to stay in alignment with a favorable trade agreement, while the Canadian government led by Mark Carney has been more antagonistic toward any change.
The Mexican trade leadership seem to have long expected the change to the USMCA, and now there are indications Canada realizes what is about to happen, albeit reluctantly.
As a consequence of their proactive position, Mexico has now passed up to 50% tariffs against a host of imports, mostly textiles, shoes, appliances, cars and automobile parts. The tariffs will apply to any imports that are not part of a previously organized free trade agreement, which has the practical outcome of hitting mostly imports from China. That approach aligns directly with the tariff rate applied by President Trump toward Beijing.
MEXICO CITY (AP) — Mexico’s Congress approved Wednesday most of the tariff increases proposed by the government on more than 1,400 products imported from China and other countries that do not have free trade agreements with Mexico.
The Senate passed the measure Wednesday evening, following the lower chamber, which had approved the increases before dawn. The governing Morena party of President Claudia Sheinbaum, who said the tariffs were necessary to spur domestic production, controls both chambers. The Senate passed the legislation with 76 votes in favor, five against and 35 abstentions.
Analysts say the real motivation is ongoing negotiations with Washington, Mexico’s most important trading partner. Sheinbaum has been trying to find relief from remaining tariffs imposed on Mexican imports by the Trump administration, which has accused China of using Mexico as a backdoor into the U.S. market.
Tariff increases of as much as 50% will affect textiles, shoes, appliances, cars and auto parts among other things beginning in January.
China will be the most affected as Mexico imported $130 billion worth of products from the country in 2024, second only to the what Mexico bought from the United States. The Chinese government was critical of the proposed tariff increases when they were announced in September. (more)
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