Mexico imposes new tariffs that will affect imports from China, India and South Korea

To protect the national industry and in line with the messages that the White House has been sending in recent years, Mexico modified its import tax law to put tariffs on products from countries with which it does not have a free trade agreement. trade. Tariff rates range from 15% to 25% and apply to industries such as footwear, plastics, glass and ceramics, among others. This, experts warn, will affect countries like China, South Korea and India, which have become some of Mexico’s main trading partners, even without having signed an agreement.

In a statement issued on Wednesday, the Ministry of Economy (SE) ensures that the measure is to compensate for the losses seen by national companies during the covid-19 pandemic. This “is reflected in the commercial displacement of some national products, as well as the impact on small and medium-sized companies,” says the text. The SE hopes that the tariffs, which will be in force from today until July 31, 2025, will “eliminate distortions in trade” and help some 206,000 micro and small businesses.

“The countries with which we do not have a free trade agreement and that are important suppliers to Mexico are China, South Korea and India,” says Juan Carlos Baker, former Undersecretary of Economy and one of the negotiators of the trade agreement with the United States and Canada, TMEC. “The three of them are in the top ten trading partners of Mexico, so the effect will be quite evident and, by far, the one that will be most affected will be China because it is the one that sells us the largest number of products.”

Mexico has trade agreements signed with 53 countries, making it one of the most open economies to foreign trade in the world. Its main trading partner, the US, has been on a trade offensive with China for almost eight years. The most recent government data in that country show that Chinese imports to the US fell by 24% in the first quarter of the year compared to the same period the previous year. “There is no doubt that there is a lot of pressure for Mexico to more clearly align itself with the policies that the United States is taking,” says Baker, also a business consultant.

The SE statement reveals, between the lines, that an increase in the prices of the products included in the modification of the law is expected, which also includes products and supplies for the steel, textile, clothing, aluminum and tire industries. . “In the definition of criteria for the adoption of these measures, and based on the commitment of the Government of Mexico to protect the most vulnerable, the products of the basic basket, health supplies, consumer goods and those that they affect the performance of the productive chains”, assures the secretariat.

For Baker, this decision limits the trade that Mexico can do with countries outside the TMEC. “We have talked a lot about commercial diversification in Mexico, about how we should not have all our eggs in one basket. But the countries with which you can diversify are the ones to which you are raising tariffs. It sounds a bit schizophrenic”, says the specialist.

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