Background on the Mexican Government’s Decision
The Mexican government, led by President Andrés Manuel López Obrador, has announced the implementation of new tariffs on imports from countries without existing free trade agreements (FTAs) with Mexico. This decision aims to protect domestic industries, particularly the automotive sector, which plays a crucial role in Mexico’s economy.
Key Details of the New Tariffs
According to the Decree published in the Diario Oficial de la Federación (DOF) on Monday, new tariff rates ranging from 5% to 50% will be applied to imports from China, India, South Korea, Brazil, and Russia starting January 1, 2026. The tariff adjustments target 1,463 customs classifications, including 9 related to automobiles and auto parts.
Impact on Various Industries
The new tariffs will affect several sectors, including:
- Automotive industry: A 50% tariff will be imposed on cars from China, South Korea, India, Brazil, and Russia, up from the previous 20% average.
- Auto parts: Tariffs will also increase by the same percentage for auto components.
- Cosmetics
- Steel
- Home appliances
- Textiles
- Footwear
- Door panels
- Glass
- Chemicals
- Threads
- Cooking appliances
- Water heaters
- Boilers
- Stoves
- Grills
- Gas hobs
- Radiators
- Washing machines
- Dryers
- Toys resembling firearms or water-launching devices
Government’s Rationale and Expected Outcomes
Marcelo Ebrard, Mexico’s Secretary of Economy, stated that the new tariffs aim to safeguard Mexican industries from foreign competition. The government expects to generate over 70,000 million pesos in revenue while keeping inflation minimal, around 0.2%.
Recommendations for the Business Sector
Experts advise businesses to review the local tariff list included in the Decree document. This will help them understand the new tariffs and anticipate potential disruptions in their supply chains for essential inputs.
Key Questions and Answers
- What is the purpose of these new tariffs? The Mexican government aims to protect domestic industries, especially the automotive sector, from foreign competition.
- Which countries are affected by these tariffs? The new tariffs apply to imports from China, India, South Korea, Brazil, and Russia.
- What sectors will be impacted by these tariffs? The tariffs affect various sectors, including automotive, auto parts, cosmetics, steel, home appliances, textiles, footwear, and more.
- What are the expected outcomes of these tariffs? The government anticipates generating over 70,000 million pesos in revenue while keeping inflation minimal.
- What should businesses do to prepare for these tariffs? Businesses are advised to review the local tariff list and anticipate potential disruptions in their supply chains for essential inputs.
