Are Marcelo Ebrard’s Tariffs Protective or Punitive?

The Mexican Federal Congress has passed long-awaited tariffs on over 1,400 products from non-members of free trade agreements with Mexico. The main trading partners are China, India, South Korea, Brazil, and Russia. These additional tariffs will be between 5% and 50%; however, the most talked-about news concerns 50% tariffs to be applied to automobiles and autoparts (El Economista, 2025).

The main political debate is whether this is a measure to protect national industry or to placate US interests in the wake of the oncoming review of the USMCA. Minister of the Economy Marcelo Ebrard is insisting this is a measure to safeguard Mexican jobs, that it is not country-specific, and that it is an economic rather than political policy. Opponents are claiming this is a diplomatic measure to align Mexico with North America, and to divert trade away from China.

This news story tops off a topsy-turvy year for international business professors who strive to explain the different varieties of tariffs at the disposal of a government: general, preferential, retaliatory, protective, punitive, reciprocal, discriminatory, compensatory, among others. In the particular case of Ebrard’s tariffs, the question is whether the tariffs are protective or punitive.

If we delve into a trading dictionary (these days through a browser or generative AI), we will find that Ebrard’s rhetoric tries hard to coincide with definitions of protective tariffs more than those of punitive tariffs. Protective tariffs are designed to shield domestic industry from foreign competition, focusing wholeheartedly on the economy. In the case of punitive tariffs, they are levied to protect national industry, but in retaliation against unfairly low costs, government subsidies in the home country, and copywriting issues.

The focus should be on what Ebrard said about dismissing the idea of this being a political matter that this is NOT the cause of a diplomatic conflict with the Chinese or another specific country, that Mexico is NOT taking issue with their policies to support their local industries to participate in unfair practices. He did, however, specifically mention these very policies as a way of giving overseas competition an unfair pricing advantage over Mexican offerings.

Putting this aside, let’s look at the wider context of what is being said. Would Mexico have had the audacity of unilaterally placing these tariffs on economic powerhouses such as China and South Korea 10, five, or even two years ago? Are these kinds of tariffs (without consulting supranational authorities such as the World Trade Authority beforehand) part of a recent global trend of retaliation and revenge? As Mexico does not have a military force on an international scale, it is perhaps finding that as a significant trading partner on the world stage, it can indeed exercise some coercion by participating in economic warfare.

The truth is that since US President Donald Trump’s reciprocal tariffs in April 2024, the world has woken up to the opportunity of participating in economic, rather than military, warfare to score points of different kinds against their opponents.

Economic warfare goes back centuries, even millennia, to the Spartans destroying the Athenian fleet and blocking the Bosphorus waterway in the fifth century BC. This was an early example of authorities controlling trade and commerce to attain political gains. Indeed, the European zero-sum economic thought of mercantilism from the 16th to the 18th centuries was just as much military as it was commercial. Through the years, the Romans, Ottomans, the British Empire, the United States, and now modern economic powers have been using coercive economic means to reach political goals.

Mexico does have a complicated year coming up internationally, and it would be foolish to assume that all international governmental decisions have purely domestic considerations. Although Mexico has had a relatively easy time in relation to the Trump reciprocal tariffs, it is still facing 25% tariffs outside the USMCA agreement for steel, aluminum, and automobiles (The Economist, 2025). Since the negotiation of USMCA in 2018, non-USMCA products have been charged a tariff of 25%, so Mexico is under considerable pressure to take action against non-USMCA members as the review approaches in 2026.

Discussing this matter with a colleague over a coffee recently, I was asked whether Mexico could actually consider itself an important commercial player against a country like China, allowing itself to partake in such economic tactics. It is important to remember that Mexico is China’s second-most important export market for automobiles in 2024, and Mexico’s most important supplier of automobiles in the first quarter of 2025 (Banxico, 2025). This is likely to have an important ripple effect in the Chinese economy, which is already in trouble, giving Mexico a newfound leverage it can use in 2026 to offset a difficult USMCA review.