China Remains Mexico's No. 2 Trade Partner Despite Tariffs

China has kept its standing as Mexico's second-largest trading partner even after new Mexican tariffs on many of its goods took effect Jan. 1, 2026, with the accumulated 12-month trade deficit reaching US$123.3 billion in April, close to a record high, according to a Banorte Financial Group report.

The analysis, titled "México–Brújula Económica," found that China ranks third among destinations for Mexican exports and second among sources of imports. "Since 2003, China has consolidated as our second-largest trading partner, behind only the United States," the report stated.

Banorte economists traced the widening imbalance to 2001, when China joined the World Trade Organization. The gap has held despite a tougher posture in Mexico City. "This has happened despite the fact that Mexican trade policy, especially against China, has become more protectionist," the report noted.

At the start of the year, Mexico applied duties of up to 50% on goods from countries without a free trade agreement, a step that left China as the most exposed supplier. The reform to the Law of General Import and Export Taxes covers 1,463 tariff lines across the automotive, steel, aluminum, plastics, appliances and textiles sectors, with rates from 5% to 50%. The change turned temporary measures adopted in 2023 and 2024 into permanent law.

Rather than contracting, the deficit has leveled near US$123 billion for the year, a shift Banorte attributed to rising sales in the other direction. "The deficit with China has stabilized in recent months... due to the growth of Mexican exports to China," the report said. Mexican shipments to China have advanced at double-digit rates, while Chinese sales to Mexico have grown more modestly.

Electronic equipment and machinery still dominate the inbound flow, accounting for 58% of total purchases as of April 2026. Electronic goods, including telephones, printed and electronic circuits, transformers, diodes and semiconductors, made up 35.2% of Chinese imports, while machinery and equipment, particularly parts and processing units, represented 22.7%. Automobiles and auto parts complete the list, led by assembled vehicles.

The tariff package has not dented overall demand. Chinese imports rose 5.23% to IS$42.85 billion in the January–April window of 2026, from IS$40.72 billion a year earlier, as a roughly 15% appreciation of the peso offset the added cost, according to Banamex. Chinese goods worth US$133.27 billion entered Mexico across all of 2025.

The government projects the broader program will lift foreign trade tax revenue by 62% in 2026, to MX$254.757 billion, as part of an import-substitution strategy under Plan México. The duties also arrived ahead of the USMCA review, with Washington pressing Mexico to harden its defenses against Chinese goods suspected of transiting the country toward the US market.

Beijing has responded by opening a trade and investment barrier investigation, while President Claudia Sheinbaum has maintained the increases target no single country. Following a working visit to Beijing, Mexican officials urged China to move toward more balanced trade, while flagging cooperation on technological innovation and public health.