Mexico Raises Tariffs on Countries Without Trade Agreements; Businesses Warn of Rising Costs and Supply Chain Disruptions
Congress approved a tariff package that raises import duties on 1,463 tariff lines for goods originating from nations without a trade agreement with Mexico, with most rates ranging between 20% and 35%. The measure, which aims to shield the domestic manufacturing base from unfair practices, will affect sectors such as automotive, textiles, apparel, plastics, home appliances, and footwear. According to industry estimates, the adjustment covers imports worth around $51.91 billion, roughly 8.3% of the total, with a particular impact on inputs and products from China, which accounts for nearly 58% of purchases from non-FTA countries.
Business organizations warn that the impact is not limited to finished goods. The Mexico–China Chamber of Commerce and Technology points out that electrical components, electronics, and critical parts integrated into export manufacturing could become more expensive or scarce, reducing competitiveness and driving up consumer prices. Additionally, authorities and industry groups report that Beijing is considering reciprocal measures, which could open the door to retaliation against Mexican exports in sectors where the country is seeking to gain ground, from agribusiness to intermediate goods.
Experts note that Mexico already has trade defense instruments—anti-dumping, compensatory duties, and safeguards—that allow for case-by-case intervention when there is evidence of harm. The private sector has called for narrowing the scope, distinguishing between inputs unavailable domestically and goods that can be produced locally, and granting a transition period to assess the real possibility of import substitution without halting production lines. Such a window, they argue, would help align policy with WTO standards and provide greater certainty for investment.
In the organized commerce and services sectors, CONCANACO SERVYTUR maintains that the process lacked broad consultation and that signs of a slowdown are already visible in border regions: higher warehouse availability, adjusted shifts in maquiladora and IMMEX operations, and reduced formal employment growth. The risk, they warn, is that intermediate goods not manufactured in Mexico—supporting thousands of jobs—could be hit hardest; micro-, small-, and medium-sized enterprises (MSMEs), which account for 99% of businesses, have less room to absorb rising regulatory and customs costs.
ANTAD and Coparmex emphasize that higher tariffs are passed on to final prices almost immediately, with the greatest impact on lower-income households. Basic items like entry-level refrigerators, microwave ovens, toys, or fans could become more expensive if there is not enough local supply. They also note that raising tariffs does not guarantee increased domestic production if structural bottlenecks persist: complex red tape, limited credit for MSMEs, logistical costs, and energy with inconsistent quality and availability.
The macroeconomic backdrop adds complexity. Overall inflation has moderated since the 2022–2023 peaks, but risks remain for goods and services. A cost shock from tariffs could add pressure to durable goods and complicate monetary policy decisions. At the same time, the nearshoring trend is keeping demand high for industrial space in Northern Mexico and the Bajío region, but many projects rely on Asian-sourced inputs to start operations. A relatively strong peso makes imports cheaper, though it does not fully offset new duties or congestion at ports like Manzanillo and Lázaro Cárdenas.
Externally, the United States and the European Union have taken a tougher stance on certain Chinese imports, and the USMCA review in 2026 could encourage further rule alignment and scrutiny over transshipment. Mexico could redirect purchases to FTA partners—including North America and several Latin American nations—but diversification takes time and doesn’t always deliver comparable specs, volumes, or prices in the short term.
The fiscal impact appears limited: the additional revenue would be marginal compared to budget consolidation needs. By contrast, second-order effects—higher consumer prices, investment plan adjustments, and possible responses from trading partners—could weigh more heavily on economic activity. Export-oriented sectors such as automotive and electronics, the anchors of manufacturing growth, are closely monitoring the supply of parts and compliance with rules of origin without raising costs.
Looking ahead, the market will be watching for possible specific exemption or deferral lists for inputs not produced domestically, the role of programs like IMMEX in offsetting effects on temporary goods, and coordination with trade defense authorities. Analysts agree that the key will be balancing targeted protection with competitiveness in an environment where regulatory certainty and reliable electricity matter as much as tariffs.
In summary: the tariff adjustment aims to level the playing field, but its design and implementation will determine whether it strengthens industry or simply raises daily living costs without boosting investment. The ability to segment critical inputs, maintain sector-specific dialogues, and anchor inflation expectations will be crucial in the coming months.
