The Mexican Congress approved the tariff wall that the government of President Claudia Sheinbaum will apply from the first minute of 2026 to a handful of Asian countries. The Senate closed the legislative process regarding the initiative launched by the president six months ago to reform the General Law on Import and Export Taxes and adjust 1,400 tariff lines with the imposition of quotas of between 5% and 50% on products from China, South Korea, India, Vietnam or Thailand, among other countries without trade agreements with Mexico. This change in direction is intended to pave the way for revising the USMCA, the trade agreement that covers more than $800 billion in U.S.-Mexico trade annually. In addition, this will represent a pocket of income, still unquantifiable, for the coffers of a Mexican state, wishing to increase its resources in the face of the slowdown in the economy. The modified tariff fractions represent $52 billion in imports, or 8.3% of the 2024 total, the draft says.
Amid the adjustments, Marcelo Ebrard’s Ministry of the Economy has found some teeth. The Chamber of Deputies added to the numerous modifications made to Sheinbaum’s initial project a last-minute change before transmitting the project to its counterpart. The adjustment leaves in the hands of the Secretariat the power to implement specific legal mechanisms and instruments for the importation of goods from countries with which there are no free trade agreements, in order to guarantee the supply of inputs under competitive conditions.
Without the vote of the Labor Party (PT), Morena and the PVEM approved the increase in tariffs for 17 strategic sectors. Auto parts, light cars, clothing, plastic, steel, household appliances, toys, textiles, furniture, shoes, paper and cardboard, motorcycles, aluminum, trailers and cosmetics are on the list that will be affected by the cut in customs duties. The opposition bloc has a contradictory position. The PAN and the PRI voted for abstention and the Citizen Movement against. The PT brought its ideological proximity to China into the debate to justify its abstention. PT members said the move could be counterproductive for Mexico in its attempt to move closer to BRICS, the group of emerging economies that make up Brazil, Russia, India, China and South Africa.
The legislative progress of the project was rapid. Three days were enough to process it in the chambers of Congress. This caused the first clash between the ruling party and the opposition in the upper house. “Once again they are abusing the majority they bought to avoid the procedures,” said PAN senator Marko Cortés, presenting a suspensive motion aimed at stopping the debate, without success. The PAN member also drew a scenario in which Sheinbaum seeks to transfer to Parliament a decision that falls within her powers as president, without the need for reform: hand-washing, he said. “If the president wants to transfer responsibility to us, at least give us time to analyze it in committees. It concerns customs tariffs, the productive sector, employment, but also the increase in prices,” Cortés said.
Morena maintained a firm defense of the presidential proposal, which underwent modifications in 60% of the original initiative. During the debate, the ruling party focused on the benefits of the handful of amendments. “Trade with these nations has been profoundly unequal for more than three decades. The best example is China: our trade deficit has reached $120 billion, six times more than that recorded in 2006. It’s crazy, China has gone too far with Mexico,” said Morenist Ricardo Sheffield.
On the opposition side, the discursive line took the same direction. Legislators from the PAN, PRI and EMEC reached agreement on several points, including that the reform will affect the country’s production processes and hit citizens’ pockets. “Mexico is not ready to do without these inputs (like the automobile industry). This endangers industries that depend 100% on imported inputs, like the toy industry. This will have an impact on the pockets of Mexicans,” said Emecista Senator Alejandra Barrales. The lawmaker also recalled the Mexican government’s speech regarding the imposition of tariffs by the Donald Trump administration. “The voice was raised to convince the neighboring country (the United States) that it should not apply customs duties on Mexican products, because the one who ends up paying is the consumer of his country and here it is exactly the same,” he concluded.
The PRI has placed at the heart of the debate the government’s need to attract investment, an approach which, with this measure, will be discouraged. “Don’t scare away investments anymore,” PRI member Cristina Ruiz said, citing former Bank of Mexico deputy governor Gerardo Esquivel. PRI members argued that the Asian tariff wall would not change Mexico’s economic outlook or promote the private investment strategy that Sheinbaum is preparing.
The changes taxed imported products which previously were between 5% and 25%, and now they will pay between 20% and up to 35% more. Some products will reach 50%, including lip makeup preparations; ordinary hair yarn, silk clothing, ferrous products, motor and land vehicles, and some of their parts and accessories, among others. In another group are previously exempt products that will now be subject to customs duties: products made from polymers, plastics, acetates, cellulose, paper, cardboard, threads and fabrics, wooden or cork shoes and certain types of toys and scale models. The changes will come into effect on January 1, 2026.
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