More tariffs on Indian exports! Mexico has approved steep tariff hikes of up to 50% from the year 2026 on a wide range of imports from India, China and several other Asian countries in order to protect the national industry and producers, Reuters reported.The bill passed by the Senate on Wednesday with 76 votes in favour, 5 against and 35 abstentions, raises import duties on around 1,400 product lines from countries without trade agreements with Mexico.
What products are likely to be impacted?
According to El Universal, the decree imposes import tariffs across a wide range of products, including auto parts, light vehicles, clothing, plastics, steel, household appliances, toys, textiles, furniture, footwear, leather goods, paper and cardboard, motorcycles, aluminium, trailers, glass, as well as soaps, perfumes and cosmetics.Most categories will face tariffs of up to 35%, while some, including passenger vehicles, will see duties rise to as high as 50% starting 2026.
What did the Mexican govt say?
Mexican President Claudia Sheinbaum’s government has argued that higher tariffs are needed to “protect local jobs and manufacturing,” even as business groups and the affected governments strongly oppose the move.“These adjustments will boost Mexican products in global supply chains and protect jobs in key sectors,” Emmanuel Reyes, who is chairman of the Senate Economy Committee, said Reuters reported.“This is not merely a revenue-raising tool, but rather a means of guiding economic and trade policy in the interest of general welfare,” he added.This comes amid America’s earlier imposition of a 25% duty citing trade deficits, followed by another 25% penalty over India’s purchase of Russian crude.
What did India, China say?
China’s Ministry of Commerce said on Thursday it would monitor Mexico’s new tariff regime and assess its impact, warning that such unilateral measures would “substantially undermine” trade interests.“China has always opposed all forms of unilateral tariff increases and hopes Mexico will correct such unilateralist and protectionist practices as soon as possible,” the ministry added.India has not issued an official response yet, as per reports.
What did the analyst say?
According to Reuters, analysts and private-sector groups said that Mexico’s tariff overhaul is partly aimed at appeasing the United States ahead of the next review of the US-Mexico-Canada Agreement (USMCA).The policy is also expected to raise about $3.76 billion in additional revenue next year, helping narrow Mexico’s fiscal deficit.
Which sector is the hardest hit ?
The tariff increase presents a significant challenge for India, whose automakers heavily rely on Mexico, India’s third-largest car export market after South Africa and Saudi Arabia.The duty on passenger cars will jump from 20% to 50%, affecting major exporters such as Volkswagen, Hyundai, Nissan and Maruti Suzuki.According to a Reuters report, Indian industry lobbied hard to stop the hike. The Society of Indian Automobile Manufacturers (SIAM) urged the commerce ministry to intervene, warning, that, “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.”The letter, reported for the first time, argued that Indian-made vehicles pose no threat to Mexico’s domestic industry, saying that “Indian-origin vehicles are not a threat to Mexican local industry as Indian vehicles do not cater to high-end segments manufactured by Mexico for serving the North American market.”Automakers also told officials that India’s shipments to Mexico account for just 6.7% of the country’s annual passenger vehicle sales, which total about 1.5 million. With tariffs doubling on compact cars, India’s main export to Mexico automakers may be forced to reassess production plans and market strategies.
