Background on the Mexican Tariff Reform
Last week, both chambers of the Mexican Congress approved a reform to the General Tariff Law on Imports and Exports, which involved raising import tariffs for goods coming from countries without existing trade agreements with Mexico. This change targets numerous tariff fractions corresponding to a wide range of products imported from these countries, particularly those from Asian nations like China and South Korea.
Legislative Process and Overlooked Detail
During the legislative process, the Chamber of Deputies nearly made a significant mistake. In their eagerness to swiftly approve executive proposals, the Economic Committee inadvertently removed a column dedicated to reflecting export taxes for the same tariff fractions subjected to import duties. Although Mexico hasn’t used export taxes for years, it was unwise to eliminate this column without proper analysis.
Fortunately, someone noticed the error, and Senator Ricardo Monreal presented a reservation in the Chamber of Deputies to rectify the oversight by the Economic Committee members.
Government’s Rationale for Tariff Increase
Following the legislative approval, Mexico’s Secretary of Economy, Marcelo Ebrard, has been explaining the logic behind raising import tariffs through media and his morning press conference.
Ebrard’s central message aligns with U.S. President Donald Trump’s trade logic: making imports more expensive to encourage domestic production and protect Mexican jobs.
Ebrard precisely stated that without tariff increases, the growth rate of imported goods subject to these taxes would have led to 350,000 job losses by the end of 2026. The new tariffs, according to the government, safeguard these 350,000 jobs in industries such as clothing, footwear, steel, and automotive.
Potential Impact on Trade and Employment
However, observing the U.S.-Mexico trade flow dynamics raises questions about Ebrard’s logic.
After eight months of rhetoric and threats of increased tariffs on U.S. imports, many of which were realized, the only clear outcome for U.S. citizens is a massive surge in government revenue for their northern neighbor.
By the end of the fiscal year in September 2025, the U.S. government had collected nearly $180 billion, approximately $100 billion more than the previous fiscal year’s reported revenue.
Beyond revenue, higher U.S. tariffs haven’t curbed the growth of imports from other countries or significantly improved employment levels.
Thus, it’s crucial for Ebrard and his team to thoroughly analyze how Mexico’s external trade will be affected by the tariff increases and, consequently, how employment in Mexico will fare.
Should unforeseen factors, not accounted for in their analysis, continue driving import growth at higher costs for Mexican consumers, all parties—consumers, businesses, and workers—will suffer.
Key Questions and Answers
- Q: What is the purpose of Mexico’s tariff reform? A: The aim is to protect domestic industries and jobs by making imported goods more expensive, encouraging local production.
- Q: Which countries are primarily affected by this tariff increase? A: The reform mainly impacts imports from countries without existing trade agreements with Mexico, particularly China and South Korea.
- Q: How has the U.S. experienced similar tariff policies? A: The U.S. implemented higher tariffs on imports, resulting in increased government revenue but not significantly curbing import growth or improving employment.
- Q: What are the potential consequences of Mexico’s tariff reform? A: If unforeseen factors drive continued import growth at higher costs for Mexican consumers, all parties—consumers, businesses, and workers—will suffer.
