The announcement comes as Washington places pressure on President Claudia Sheinbaum to crack down on Chinese industry in Mexico.
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Mexico plans to place a 50% tariff on cars from China and other Asian countries, taking a leaf out of US President Trump’s trade playbook.
The measure was proposed to congress as part of a wider draft bill, Economy Minister Marcelo Ebrard said on Wednesday. The bill seeks to place higher tariffs on more than 1,400 categories of products coming from countries with which Mexico has no trade agreement, thereby impacting $52 billion (€44bn) of imports.
Other nations set to be impacted by the bill, which still needs to be approved by congress, include South Korea, India, Indonesia, Russia, Thailand and Turkey.
Aside from cars, Mexico wants to target imports like steel, toys, motorcycles, and textiles, with proposed tariffs ranging from 10-50%.
The 50% rate on automobiles is more than double the current levy, set at 15-20%, and is the maximum allowed under World Trade Organization rules.
According to data from Chinese consultancy Automobility, Mexico was the world’s biggest buyer of Chinese-made cars in the first half of this year, ahead of the United Arab Emirates and Russia.
Trade agreement up for review
Mexico claims the tariff proposal aims to strengthen national production and protect jobs as cheap, Chinese goods enter the local market. The Economy Ministry said in a document that the measures would safeguard 325,000 at-risk industrial and manufacturing jobs.
The draft bill also comes as the US is placing significant pressure on President Claudia Sheinbaum to crack down on Chinese industry in Mexico. Washington is concerned that Mexico could be used as a “backdoor” for goods from China to circumvent steep duties, notably as Mexico has favourable access to the US market.
The USMCA, a free trade agreement between the US, Mexico, and Canada, is set for review next year. Mexican President Sheinbaum will be eager to preserve the deal by appeasing the US, although tariffs on Chinese goods could push up prices for consumers.
The Mexican government holds a significant majority in congress, meaning the bill is likely to be approved.
