Mexico Unveils Massive Tariff Plan Targeting China Imports Amid US Trade Tensions and USMCA Renegotiation Looming

Listeners, on September 10, Mexico’s President Claudia Sheinbaum unveiled legislation that could impose tariffs ranging from 10% to 50% on a broad array of goods, notably targeting vehicles, auto parts, steel, plastics, textiles, clothes, toys, furniture, paper, and glass. This sweeping proposal, linked to Mexico’s 2026 budget and “Plan México” industrial strategy, aims to reduce import reliance and bolster domestic industry, focusing on sourcing at least half of strategic supplies within the country. Mexico Economy Minister Marcelo Ebrard noted that these tariffs—especially those affecting the nearly 29% of car imports coming from China—could yield 70 billion pesos, or roughly 3.76 billion US dollars, in extra government revenue. While Mexico has free trade agreements with around 50 countries, China is notably excluded from the exemption list and stands to be hit hardest. In the first half of 2025, China exported nearly 280,100 vehicles to Mexico, up 25% from the previous year, making Mexico its top destination after Russia. Yet, Chinese automakers like BYD can still offer competitive prices in Mexico, with models such as the Dolphin Mini selling for less than half the price of comparable US-made electric vehicles. International responses were swift, with China urging Mexico to reconsider, warning of suspended investments in automotive and electronics sectors. Chinese officials accused Mexico of appeasing US tariff pressures, highlighting the complex dynamics as Mexico treads carefully ahead of next year’s renegotiation of the US-Mexico-Canada Agreement (USMCA). Canadian Prime Minister Mark Carney recently visited Mexico City, emphasizing efforts to strengthen trade ties and prepare for challenging negotiations with the Trump administration. Turning to US tariff developments, President Donald Trump reinstated an expanded reciprocal tariff policy in late July, with most revised rates effective since August 7. Early modeling by Wealthca shows the US now applies a baseline 10% tariff on most imports, with country-specific rates on steel and aluminum up to 50%. Critically for Mexican exporters, Mexican goods not registered as USMCA-compliant now face tariffs as high as 25% to 35%. According to Mondaq’s Trump Tariff Tracker, these rates affect a broad spectrum of goods, but certain exclusions remain, such as smartphones and major electronics. Recent headlines also report Mexico is suspending postal shipments to the US following the end of the “de minimis” exemption, which previously allowed packages under $800 to enter the US duty-free. Mexican manufacturers and US-bound exporters now grapple with these ever-changing trade restrictions, with Kia and other global automakers ramping up Mexican production for the domestic Latin American market, even as car exports to the US face tariffs of 25% to 15%, based on North American content requirements. Official World Tariff Profiles 2025 data show that Mexico’s average weighted tariff rate remains among This content was created in partnership and with the help of Artificial Intelligence AI.