Chinese Imports Drop; Currency Gains Cloud Results

China's Economy Ministry reported a 28.4% year-over-year decline in imports from China between January and May 2026, attributing the drop to Mexico's tariff package covering 1,463 product lines across 17 sectors, with duties reaching 50% on goods from countries lacking a free trade agreement with Mexico. The measure, part of the Sheinbaum administration's Plan México import-substitution strategy, primarily affects footwear, automotive, textile, appliance and steel manufacturers, with the government citing protection of roughly 350,000 domestic jobs as its rationale. However, separate trade data showing a 5.23% rise in Chinese imports during the same period raises questions about the reported decline, while Beijing has flagged the measures as a trade barrier and reserved the right to retaliate against over US$30 billion in affected exports.

Five months into Mexico's sweeping tariff overhaul, Economy Minister Marcelo Ebrard announced that imports from China fell 28.4% between January and May compared to the same period last year, a decline he framed as proof the government's import-substitution strategy is taking hold.

The figures Ebrard presented cover the 1,463 tariff lines Congress approved in late 2025, spanning 17 industrial sectors with duties reaching as high as 50%. Total imports across those tariffed categories dropped 23.2% year-over-year, while the China-specific figure came in even steeper. 

The breakdown by sector showed footwear imports collapsing 59%, light vehicles falling 35%, home appliances down roughly 27%, and textiles slipping 13.9%. Ebrard told the assembly he expects the pullback to eventually show up as renewed output for domestic footwear, textile, apparel and appliance producers, arguing the numbers demonstrate Mexico is "reducing imports in an important share."

A Policy Years in the Making

The measure took effect January 1 and applies to any country without a free trade agreement with Mexico, China, South Korea, India, Vietnam, Thailand and Brazil among them, though China accounts for the largest share of the trade affected. The Sheinbaum government has consistently maintained the tariffs target no single nation, framing them instead as part of Plan México, the administration's broader push to raise domestic content in national supply chains and protect an estimated 350,000 jobs concentrated in automotive, steel, footwear, textile and apparel manufacturing.

This week's numbers build on a policy rollout Mexico Business News has tracked in stages. In March, Mexico converted its Asian steel duties into permanent law, locking in rates of 10% to 35% on 220 steel products after domestic mills reported capacity utilization stuck near 55%. Ebrard described that step as tightening a second front of import controls, one that also meant closer scrutiny of IMMEX and other temporary-import programs to stop them from being used as pass-through routes for Asian goods ultimately headed to the US market. 

The automotive figures echo an earlier phase of the same campaign, when Mexico set duties of 25% to 35% on Chinese-brand light vehicles including BYD and Chirey, a move industry groups warned could ripple through tens of thousands of jobs tied to Chinese-brand distribution networks in the country.

Beijing Pushes Back, and the Import Data Complicates the Story

China's Ministry of Commerce has not accepted the measures quietly. The ministry has labeled Mexico's tariff package a trade barrier and reserved the right to retaliate, a warning attached to more than US$30 billion in affected Chinese exports, with Beijing estimating potential losses near US$9.4 billion concentrated in its mechanical, electrical and automotive sectors. In response, Mexico committed to several rounds of bilateral talks with China this year, including sideline meetings at the APEC forum Beijing is hosting, with Ebrard proposing the two sides start by comparing the market-access terms each imposes on the other's exporters.

Yet more recent trade data complicates the reduction narrative Ebrard laid out. A separate Mexico Business News analysis found that Chinese imports actually grew 5.23% during the January-April window of 2026, climbing to US$42.85 billion, with a stronger peso partially offsetting the tariffs' intended sting on textiles, toys and housewares. That figure sits awkwardly alongside Ebrard's 28.4% decline, suggesting the two datasets may be measuring different baskets of goods or different time windows. Separately, other reporting shows China holding onto its position as Mexico's second-largest trade partner despite the duties, with the bilateral deficit stabilizing near US$123 billion as Mexican exports to China climb at a faster clip than Chinese sales into Mexico.

What's Still Unproven

The footwear sector's steep 59% import decline is notable given its recent struggles, Mexican industry groups have reported dozens of shoe manufacturers closing in prior years as inexpensive Chinese footwear flooded the market. Textile plants in hubs like Puebla, Tlaxcala and Jalisco have similarly described running at a fraction of capacity, squeezed by cheap fabric imports from China and Vietnam.

What remains unclear is whether the import decline Ebrard cited is translating into new orders for those domestic manufacturers, or whether buyers are simply redirecting sourcing toward other non-FTA countries, Vietnam, Thailand and South Korea remain under the same tariff schedule but have not been singled out in the government's public reporting. The tariffs also sit inside Mexico's ongoing USMCA renegotiation, where Ebrard has simultaneously pressed Washington to roll back Section 232 steel and aluminum duties, arguing Mexico's own enforcement against China should count in its favor during the review, a dual positioning likely to define Mexican trade policy through the rest of 2026.