Mexico Tariff Package Aims to Protect 350,000 Industrial Jobs

Mexico’s federal government approved a broad tariff package aimed at protecting up to 350,000 jobs across key manufacturing sectors, said Minister of Economy Marcelo Ebrard, citing rising imports sold at prices below international benchmarks.

The measure, sent to Congress on Sept. 8, 2025, followed months of technical analysis, sector-specific adjustments and dialogue with industrial chambers and foreign governments. Authorities said the package was designed to correct competitive imbalances that have increasingly affected domestic producers.

According to the Ministry of Economy, imports surged sharply over the past two years in several industries critical to employment, including steel, textiles, apparel, footwear and automotive manufacturing. Import growth reached 12.4% in steel, 20.8% in apparel, 22.3% in footwear and 34% in the automotive sector.

Without intervention, officials estimated that up to 350,000 jobs could be lost by the end of 2026, particularly in automotive manufacturing, which accounts for roughly one-third of Mexico’s total manufacturing employment.

Product-Based Tariff Design

The tariff package was structured by product rather than by country of origin. It covers 1,466 tariff lines across 17 strategic sectors, including auto parts, light vehicles, steel, plastics, household appliances, furniture, paper and cardboard, aluminum, motorcycles, glass, soaps and cosmetics.

Tariffs apply only to imports from countries with which Mexico does not have a free trade agreement, in line with existing international commitments.

During the legislative process, authorities adjusted measures affecting sectors such as auto parts, steel, textiles, apparel and aluminum after companies warned about short-term limitations in replacing imported inputs or the risk of higher production costs. Officials said the changes were intended to avoid supply-chain disruptions and limit inflationary pressures.

The Ministry of Economy estimated the inflationary impact of the package at approximately 0.2 percentage points after reviewing each tariff line individually.

Alignment With Industrial Policy

Officials said the initiative aligns with the government’s broader “Plan México,” which seeks to increase domestic content in supply chains, substitute imports where feasible, strengthen the “Made in Mexico” strategy, raise national investment to 28% of gross domestic product and generate 1.5 million jobs.

The policy also aims to reinforce local suppliers, particularly small and medium-sized enterprises, which represent nearly 90% of Mexico’s economic units.

The government held institutional dialogue with organizations including the Confederation of Industrial Chambers of Mexico and the National Chamber of the Iron and Steel Industry, as well as representatives from the textile, apparel, aluminum, automotive, auto parts, trade and electrical manufacturing sectors. Talks were also held with major exporting countries such as China, South Korea, India and Indonesia.

Regional Impact and Trade Balance

Jobs considered most at risk were concentrated in industrial states including Aguascalientes, Baja California, Chihuahua, Coahuila, Estado de México, Guanajuato, Jalisco, Nuevo León, Puebla and Querétaro.

Authorities said the measures were preventive, responding to trade imbalances that in some cases reached ratios of 10 to 1 between imports and exports. Ebrard emphasized that the approach was economic and commercial, aimed at protecting employment and addressing unfair competition rather than geopolitical concerns.

Development Hubs and Investment Projects

Alongside the tariff package, the federal government presented an update on its industrial development hubs, known as Polos de Desarrollo. By 2026, 15 hubs are expected to advance, focusing on investment promotion, infrastructure, fiscal incentives and local capacity building.

Confirmed investments are concentrated in automotive, logistics, energy, steel, manufacturing, the digital economy and agribusiness.

Highlighted projects include automotive investments in Durango, Tlaxcala, Puebla and Michoacán; logistics developments in Celaya, Hidalgo, Tlaxcala and Michoacán; a pharmaceutical active ingredient plant in Hidalgo with an estimated investment of US$2 billion; and agrifood projects in Puebla, Michoacán and Campeche.

Officials said six development hubs are expected to begin operations or complete their first phase between January and March 2026, financed through a mix of federal funds, development banks, state governments and private capital.