Mexico Eyes 50% Tariffs on Non-FTA Vehicles, China Pushes Back

Mexico has proposed raising tariffs on light vehicle imports from countries without trade agreements, including China, to as high as 50%. The measure, included in the 2026 Economic Package, prompted a direct response from Beijing, which described the plan as coercive and vowed to defend its trade interests.

The Ministry of Economy submitted the proposal to Congress this week, seeking to adjust tariffs on 1,463 tariff lines—equal to 8.6% of Mexico’s total imports—with an estimated trade value of US$52 billion. “This initiative seeks to protect the national industry against dumping practices and will apply exclusively to countries with which Mexico does not have trade agreements,” said Marcel Ebrard, Minister of Economy.

The auto sector is central to the proposal. Current tariffs on Chinese vehicles are around 20%, but under the plan they could rise to 50%. Tariffs on auto parts would also increase from 35% to 50%, while industries such as steel and household appliances would face new duties.

China, Mexico’s largest exporter without a free trade agreement, would be significantly affected. Vehicle exports from China to Mexico grew nearly 10% in 2024. Industry data show Chinese automakers went from almost no market share a decade ago to 30% of Mexico’s light vehicle market last year.

Beijing rejected the proposed tariff hike. “China firmly opposes any coercion by others to impose restrictions on China under various pretexts, which undermines China’s legitimate rights and interests. We have always advocated for inclusive and beneficial economic globalization. We hope Mexico will join us in promoting global economic recovery and trade development,” said Lin Jian, spokesperson for China’s Foreign Ministry.

In addition to China, the proposal targets imports from South Korea, India, Indonesia, Russia, Thailand, and Turkey, all of which lack free trade agreements with Mexico. Textiles and apparel from these countries could face tariffs of up to 50%, potentially affecting online sales of Chinese brands in the Mexican market.