Mexico is making waves in the world of international trade, and it’s doing so with the stroke of a pen—and a hefty new set of tariffs. This week, President Claudia Sheinbaum’s administration unveiled a sweeping proposal to raise tariffs on $52 billion worth of imported goods, targeting a staggering 1,371 product categories from Asia. While the measure isn’t aimed exclusively at China, the world’s second-largest economy is expected to feel the brunt of the impact, especially in the automotive sector. The move, which is part of Mexico’s 2026 budget proposal, was delivered to the Chamber of Deputies and, with Sheinbaum’s Morena party holding a majority, its passage seems all but certain, according to Sourcing Journal.
So, what’s behind this dramatic shift? For starters, Mexico’s trade deficit with China has ballooned in recent years. Chinese imports into Mexico have nearly doubled over the last decade, reaching $130 billion, while Mexico’s exports to China remain under $10 billion. That’s a gap President Sheinbaum is determined to close. As Economy Secretary Marcelo Ebrard explained, the tariffs will apply to countries that don’t have free trade agreements with Mexico, affecting about 8.6 percent of Mexico’s total imports. The targeted goods include textiles, apparel, footwear, furniture, vehicles, and electronics—essentially, many of the products that fill Mexican stores and homes.
But the story doesn’t end with simple economics. The timing and scope of Mexico’s new tariffs are also deeply entwined with regional politics and the shifting sands of global supply chains. According to Reuters, Chinese companies have invested heavily in manufacturing and logistics infrastructure in Mexico in recent years, aiming to bring production closer to their ultimate end market: the United States. Thanks to the U.S.-Mexico-Canada Agreement (USMCA), companies that manufacture in Mexico can enjoy duty-free access to the U.S. and Canadian markets. This has allowed some China-based firms to effectively sidestep direct American tariffs by moving operations to Mexican soil—a workaround that’s drawn the ire of former U.S. President Donald Trump, who has repeatedly criticized Mexico as a backdoor for illicit goods and drugs, often produced with chemical precursors from Asia.
In fact, the new tariffs come as negotiations between Trump and Sheinbaum remain ongoing. A proposed 30 percent tariff on Mexican imports into the U.S., initially set to take effect on August 1, 2025, was postponed for 90 days while the two administrations hammer out a deal. Observers say Mexico’s latest move may be as much about currying favor with Washington as it is about rebalancing trade with Beijing. Still, President Sheinbaum insists that the new tariffs are not meant to provoke or appease any particular nation.
“We don’t want conflict,” Sheinbaum said during a press conference on September 11, as reported by Reuters and Indonesian outlet DigitalSiber.id. She stressed that the tariff hikes are designed to boost Mexico’s economy and strengthen local production capacity as part of an industrial strategy that predates Trump’s election. “That is not the objective,” Sheinbaum emphasized when asked if the measures were meant to placate the United States. “What we want is to be able to discuss various things without causing conflict.”
To that end, Mexico is actively negotiating with ambassadors from countries affected by the proposed tariffs, signaling a willingness to talk things through rather than escalate tensions. Yet the affected parties aren’t taking the news lightly. China’s Foreign Ministry spokesperson Lin Jian responded on September 11, declaring, “We will firmly protect our rights and interests in light of the developments of the situation.” Lin added, “China and Mexico are important members of the Global South and our economic and trade cooperation is win-win in nature. China attaches great importance to its relations with Mexico and hopes that Mexico will work with China to jointly advance world economic recovery and the development of global trade.”
Despite these diplomatic overtures, China’s opposition to the tariffs is clear. Lin Jian criticized the restrictions as being imposed under “various excuses” and vowed that China would safeguard its interests. The tension is especially acute in the automotive sector, where China has become Mexico’s top supplier of light vehicles. According to Mexico’s national statistics office INEGI, China exported more than 177,000 automobiles and light trucks to Mexico in the first eight months of 2025 alone. Interestingly, U.S. manufacturer General Motors was the largest exporter from China to Mexico, with the Chevrolet Aveo leading the pack, followed by a range of pickup trucks, vans, and SUVs.
The new tariffs on Chinese cars—set to reach up to 50 percent—are a major component of the overhaul. Mexico’s economy minister explained that Chinese vehicles have been entering the market at prices below established reference points, a practice that the government argues undermines local industry. The goal, officials say, is to make Mexican products more competitive and to ensure a level playing field for all companies operating in the country.
Industry reaction within Mexico has been largely supportive. The Mexican automotive industry association AMIA issued a statement welcoming the plan, saying, “As an industry, we believe that the measure ensures that any company participating in the Mexican market does so under fair conditions.” AMIA further argued that the move would boost jobs and increase consumer guarantees, a sentiment echoed by other sectors affected by the tariffs.
Of course, the broader context cannot be ignored. Mexico is a major manufacturer of cars, exporting the majority of its production to the United States. At the same time, it imports hundreds of thousands of vehicles each year, many of them from China. The interplay between domestic production, foreign investment, and international trade agreements like the USMCA means that every tweak to tariff policy sends ripples across the continent—and beyond.
For now, President Sheinbaum’s administration is walking a tightrope, seeking to address a yawning trade deficit, shore up local industries, and maintain cordial relations with both Washington and Beijing. Whether the new tariffs will achieve all these goals—or spark unintended consequences—remains to be seen. But one thing is certain: Mexico’s trade policy is front and center on the world stage, and the stakes couldn’t be higher for manufacturers, consumers, and diplomats alike.
As negotiations continue and the world watches closely, the outcome of Mexico’s bold tariff gambit will shape not just the future of its own economy, but the delicate balance of global trade in a time of shifting alliances and growing competition.
