Mexico to Raise China Tariffs, Hopes for US Relief on Steel
Domestic Manufacturers Reliant on Chinese Inputs Are Warning of Rising Costs
Key Takeaways:
- Mexico’s Congress is set to vote this week on President Claudia Sheinbaum’s plan to impose tariffs of up to 50% on many Asian imports starting Jan. 1.
- The revised bill targets products from clothing to metals after more than 750 changes, with the Finance Ministry projecting 51.9 billion pesos in added 2026 revenue.
- The move has raised expectations among Mexican businesses that closer alignment with U.S. trade policy could spur US tariff relief on Mexican steel and aluminum, though outcomes remain unclear.
[Stay on top of transportation news: .]
Mexico’s Congress is set to vote this week on President Claudia Sheinbaum’s proposed tariffs on China, part of a broader plan to shield local producers and ease trade tensions with the U.S. The move is fueling expectations that it could soon make room for U.S. tariff relief on Mexican steel and aluminum.
The bill, which imposes tariffs of up to 50% on imports from Asia and China in particular, was approved late Dec. 8 by the lower house’s economy committee, which also set Jan. 1 as the date the new levies would take effect. The proposal now goes to a vote on the lower house floor and then to the Senate, which is expected to approve it by Dec. 11.
Sheinbaum’s administration sent the proposal to Congress on Sept. 9, but lobbying from Asian countries and domestic opposition — from both the private sector and legislators — slowed its progress. Manufacturers reliant on Chinese inputs warned of rising costs, and lawmakers, including some from the ruling party, sought to avoid a dispute with a region many consider crucial to Mexico’s trade diversification.
After a review by the Finance and Economy ministries, at least 750 changes were made to the original proposal. Of more than 1,400 products initially targeted, a little over 300 ultimately ended up exempt.
Claudia Sheinbaum byStephania Corpi/Bloomberg
Even so, the levies will apply to a wide range of products, from clothing and footwear to steel, aluminum and auto parts. The Finance Ministry estimates an additional 51.9 billion pesos ($2.8 billion) in import revenue in 2026, an 8.3% increase from 2024.
Tariff Relief Hopes
By aligning its trade policies more closely with those of the U.S., Mexico is raising barriers against what officials have described as “unfair competition” from Asian countries. The move to limit imports from China comes alongside efforts to strengthen commercial and manufacturing ties among the U.S., Mexico and Canada, an attempt to build a robust “Fortress North America.”
This narrative has fueled expectations among Mexican businesses that implementing tariffs on China could create conditions for the U.S. to lower its levies on Mexican steel and aluminum, according to four people familiar with the negotiations.
It remains unclear whether any relief would come through a reduction in tariff rates on all steel imports, or through the introduction of tariff-free import quotas, the people said, asking not to be identified because the discussions are not public.
A worker cuts a stainless steel sheet at a steel manufacturing facility in Mexico City. (Mauricio Paulus/Bloomberg)
The U.S. Trade Representative’s office declined to comment, and the Commerce Department didn’t respond to a request for comment.
President Donald Trump raised tariffs on all steel and aluminum imports from Mexico to 50% from 25% on June 3. In his executive order, he said the lower rate had been insufficient to develop and protect U.S. production. Mexico’s economy minister, Marcelo Ebrard, said at the time that the increase was “unfair, unsustainable and inconvenient.”
Written by Gonzalo Soto, Eric Martin and Alex Vasquez
Want more news? Listen to today's daily briefing belowor go here for more info:
