In a new development in the ongoing global trade war, Mexico has imposed steep tariffs of up to 50% on a wide range of imports from India, China, and several other Asian countries. The decision comes shortly after the US raised its own tariffs on Indian products to 50%, signalling a tougher trade environment for New Delhi.
According to a Reuters report, Mexico’s Senate gave approval to the tariff hike on Wednesday (December 10). The new duties will be enforced starting January 1, 2026. The tariff list includes automobiles, auto components, textiles, plastics, and steel—products commonly exported by India and other Asian economies that do not have formal trade agreements with Mexico. Countries likely to face the impact include India, South Korea, China, Thailand, and Indonesia.
Mexico expects to generate around $3.76 billion (approximately Rs 33,900 crore) in additional revenue next year through this move.
Why Mexico Took This Step
However, it must have shocked people and raised a question in their minds about why a nation like Mexico is putting tariffs on India and other Asian nations. Let’s find a suitable answer for that.
The tariff hike comes as Mexican President Claudia Sheinbaum tries to support local manufacturing and reduce dependence on foreign imports. However, analysts believe a political motive may also be involved: easing pressure from US President Donald Trump ahead of the 2026 review of the US-Mexico-Canada Agreement (USMCA). The US remains Mexico’s biggest trading partner and holds good influence over its trade decisions.
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Mexico has increased duties on Chinese products earlier this year, but Trump has repeatedly criticised the Sheinbaum government. In recent months, he has threatened 50% tariffs on Mexican steel and aluminium, and an extra 25% levy for allegedly failing to curb fentanyl smuggling into the US. He also warned of a 5% tariff this week over a dispute related to a 1944 water-sharing treaty.
Hence, it’s possible that to appease President Trump, Mexico has put tariffs on the Asian economies, including India.
Impact on India
So, one must be thinking how these tariffs will affect India? The new Mexican tariffs are expected to affect India–Mexico trade relations, which touched a record $11.7 billion in 2024. India is currently the ninth-largest market for Mexican exports. More importantly, India enjoys a large trade surplus with Mexico, exporting nearly $8.9 billion worth of goods while importing only $2.8 billion in 2024.
Indian cars, auto parts, and passenger vehicles form a major portion of the exports to Mexico. With tariffs now climbing as high as 50%, these categories are likely to face a decline next year, affecting Indian manufacturers and reducing overall bilateral trade momentum.
Hence, this will have an impact on both economies, but time will tell whether Mexico made Trump happy or the decision put Mexico at a loss with Asian Nations.
