In a move that’s reverberated across the globe, Mexico’s government has announced plans to sharply increase tariffs on car imports from Asian countries—including China—raising rates from 20% to as much as 50%. The measure, revealed on Wednesday, September 10, 2025, by Secretary of Economy Marcelo Ebrard, is part of a broader effort to protect Mexico’s domestic manufacturing sector and safeguard hundreds of thousands of jobs. But the decision has sparked a diplomatic spat, with China issuing stern warnings and signaling possible countermeasures, while Mexico’s leaders insist the tariff hike is about economic self-defense, not geopolitics.
According to Reuters, China’s Foreign Ministry did not mince words in its response. On Thursday, September 11, Beijing declared that any Mexican move to raise tariffs on Chinese goods would be considered “appeasement” to U.S. “bullying.” Foreign Ministry spokesperson Lin Jian went further, stating that China “resolutely protects” its “rights and interests” and that the measure would “reduce business confidence in investing in Mexico.” China’s Commerce Ministry echoed these concerns, urging Mexico “to exercise extreme caution and consider carefully before taking any actions.” The ministry warned that any unilateral tariff increase—even if technically allowed under World Trade Organization (WTO) rules—would be seen as “appeasement and compromise toward unilateral bullying.”
This sharp rhetoric comes as Mexico mulls import duties of up to 50% on a range of goods, not just cars, from countries lacking trade agreements with Mexico, such as South Korea, India, Indonesia, Russia, and Thailand. The list of affected sectors includes textiles and steel, as well as paper, cardboard, glass, motorcycles, soaps, perfumes, and cosmetics. The economic impact is estimated at roughly $52 billion, equivalent to 8.6% of Mexico’s total imports, according to The Wall Street Journal.
The Mexican government’s rationale is straightforward: defend domestic jobs and industries from what it describes as unfair competition. Foreign Minister Marcelo Ebrard told Radio Fórmula that the tariff hike is “not a pretext, it’s the trade system,” referencing WTO rules that allow such measures. “It doesn’t have a geopolitical rationale, but rather one of protecting our industry,” he argued, emphasizing that nearly 320,000 national jobs are at risk due to imports priced below reference prices. Ebrard’s comments aimed to distance Mexico from suggestions that it’s simply caving to U.S. pressure—an accusation that’s been swirling since former President Donald Trump accused Mexico of acting as a back door for Chinese products entering the U.S. market.
President Claudia Sheinbaum has echoed this sentiment, repeatedly insisting that the tariffs are not targeted at any specific country and are not the result of U.S. coercion. “We have a very good relationship with China and we want to continue having a very good relationship with them,” Sheinbaum told reporters, according to Mexico News Daily. She described the measure as one “that has to do with the strengthening of our economy and Plan México.” Plan México is the administration’s project to boost domestic industry by reducing the tax advantages enjoyed by foreign producers exporting to Mexico. The plan would see average tariffs rise from 16.1% to 33.8%, with some products facing the maximum 50% allowed by the WTO.
Despite the diplomatic tension, Sheinbaum has taken a conciliatory tone, stating on September 11, “We are speaking with the Chinese ambassador to Mexico, with South Korea... We are explaining to them that this is a measure that has to do with strengthening our economy. What we want is to talk without the need to generate any conflict.” She also dismissed concerns about possible inflationary effects, noting, “A very detailed study was conducted. There are many products that do not have these tariffs.”
Still, China’s response has been firm. “China will take necessary measures ... to resolutely safeguard its legitimate rights and interests,” the Ministry of Commerce said in a statement translated by CNBC. The ministry pointed out that “China and Mexico are mutually important trade partners,” and added, “We are not willing to see both sides' economic cooperation affected by this situation.” China also criticized what it called U.S. “abuse of tariffs,” urging countries to safeguard free trade and warning that “coercion of others should never sacrifice third-party interests.”
This isn’t just a bilateral spat. The move comes as the global auto industry faces a wave of protectionist measures. Brazil, for example, announced a 35% tariff on electric car imports in July, and the European Union has also erected trade barriers against Chinese cars, targeting electric vehicles in particular. Notably, Mexico has become the leading export destination for Chinese cars, surpassing Russia. In the first half of 2025 alone, China shipped approximately 280,100 vehicles to Mexico—a 24% year-on-year increase, according to Bloomberg and the China Passenger Car Association. For China, with domestic consumption sluggish, exports are a lifeline for its economic engine.
But the trade relationship is far from balanced. As El Universal columnist Mario Maldonado observed, “Mexico’s trade deficit with China will reach US $119 billion in 2024, the largest in history, and in the first half of 2025 alone it totaled more than US $57 billion.” This staggering gap has fueled calls within Mexico to take action in defense of local industry and jobs.
Mexico’s auto industry is particularly vital—it’s the country’s largest employer, according to Jorge Guajardo, a former Mexican ambassador to China. The new tariffs are expected to hit not just Chinese brands, but also other Asian automakers. Yet, as Eugene Hsiao of Macquarie Capital told CNBC, “The thing that's very important about Chinese autos is that where they're taking market share, a lot of times, it's not really from the Western brands. It's really from the other Asian brands. I think that's what we've seen in Mexico.”
Chinese companies have invested heavily in Mexico, with more than $7 billion in announced projects from June 2022 to July 2024, according to the Coalition for a Prosperous America. However, it’s unclear how many of these projects have been completed, and the specter of higher tariffs could chill future investment. The Mexico-China Chamber of Commerce has called for Mexico to reconsider the measures, arguing they “threatened the competitiveness of goods sold in Mexico and the adoption of electric vehicles in the country,” as reported by Reuters.
South Korea, also affected by the proposed tariffs, has reached out to Mexican officials to initiate talks. Meanwhile, Mexico’s Congress is set to debate the tariffs, with the Sheinbaum administration preparing for renegotiations over the United States-Mexico-Canada Agreement (USMCA) expected to begin in January 2026. Some analysts, cited by The Guardian, see the tariffs as a prelude to these talks and a readjustment of Mexico’s international trade posture.
Amidst the flurry of accusations and defenses, President Sheinbaum’s measured approach has been notable. She’s pledged to speak with Chinese officials to address their concerns directly, hoping to avoid a full-blown trade or diplomatic conflict. Whether this will be enough to stave off Chinese countermeasures—and what impact the tariffs will ultimately have on Mexico’s economy, its trade relationships, and the global auto industry—remains to be seen. But for now, the world is watching closely as two economic heavyweights navigate one of the most consequential trade disputes of the year.