Mexico Suspends Tariff Hike on 1,371 Chinese Products Amid Trade Tensions

President Claudia Sheinbaum of Mexico officially announced on 9 October 2025 during her daily press briefing that the Mexican Congress would delay the approval of the government's proposal to raise tariffs on 1,371 products originating from China and other Asian countries. The move follows strong objections from Beijing, which has warned Mexico of potential retaliatory measures if the proposal moves forward.

In early September 2025, the Sheinbaum administration submitted a tariff increase proposal to the Mexican Chamber of Deputies. The proposal aimed to raise tariffs on a wide array of products, including automobiles, textiles, apparel, plastics, steel, and others, to as high as 50%. The increase was partly driven by trade pressure from US President Donald Trump, who demanded that Mexico strengthen controls on 'transshipment' goods originating from China to prevent Chinese products from entering the US market via Mexico.

The tariff proposal targeted imports from countries without free trade agreements (FTAs) with Mexico, including China, South Korea, India, Indonesia, Russia, Thailand, and Turkey.

Key Product Categories Affected by the Tariff Increase

The proposed tariff hikes would affect 1,371 different goods. Notable categories include:

Automobiles and components: Tariffs on light vehicles would rise from the current 15%-20% to 50%, while tariffs on automotive parts would increase from 0%-35% to between 10%-50%. This move would notably impact Chinese-manufactured electric vehicles.

Other product categories:

· Motorcycles: 35% tariff increase

· Steel products: 35% tariff increase

· Toys: 35% tariff increase

· Aluminium products: 10%-50% tariff increase

· Footwear: 10%-50% tariff increase

· Cardboard boxes: 10%-50% tariff increase

· Textiles and fabrics: 10%-50% tariff increase

· Bathroom fixtures: 10%-50% tariff increase

· Personal care products: 10%-50% tariff increase

· Pumps and fans: 10%-50% tariff increase

The proposal had significant backing within Mexico's ruling Morena party, which holds a majority in the House of Representatives. This made it likely that the proposal would have passed if put to a vote. However, following the sharp criticism from China, the proposal now faces an uncertain path forward.

China's Strong Response

China has criticised the proposal, stating it would undermine investor confidence. China has also issued a warning to Mexico, indicating it would take 'necessary measures' to safeguard its 'legitimate rights and interests'. China launched a trade investigation against Mexico late last month, with analysts suggesting this was a direct warning to Mexico.

Mexico Shifts Approach in Light of Chinese Concerns

At a press conference on 9 October, Sheinbaum stated: 'We are holding these meetings with different countries to see if we can adapt what we are presenting to Congress for approval this year.' She emphasised that the government would prioritise consultations to avoid hasty legislation. 

Ricardo Monreal, leader of the ruling Morena party in the lower house, subsequently confirmed to reporters that Congress would 'suspend' deliberations on the proposal, resuming discussions in late November. Monreal added: 'We must scrutinise this proposal with the utmost rigour.' Morena lawmakers indicated the tariff proposal 'will not pass in its current form', suggesting it may be 'watered down' through either reduced tariff increases or a narrower scope of application.