The Mexican government is preparing to raise tariffs on Chinese imports as part of its 2026 budget proposal, in a move aimed at protecting domestic manufacturers and aligning with U.S. demands to curb subsidized competition, Bloomberg reported, citing people familiar with the plans.
The proposed duties would cover products including cars, textiles, and plastics, according to three people briefed on the matter. Other Asian countries may also face higher tariffs, one of the sources said. The specific rates have not yet been finalized, and the plan could still change before the draft revenue proposal is submitted to Congress on September 8.
President Claudia Sheinbaum’s administration is expected to face little resistance in passing the budget, as her party and its allies hold a two-thirds majority in both houses of Congress. Officials from the president’s office and the Economy Ministry declined to comment, while the Finance Ministry did not immediately respond to Bloomberg’s request for comment.
The move follows sustained pressure from former U.S. President Donald Trump, who has called on Mexico to impose higher tariffs on Chinese goods in line with Washington’s own measures. Earlier this year, Mexican officials floated the idea of a “Fortress North America” trade framework that would tighten restrictions on Chinese imports while bolstering regional supply chains across the U.S., Mexico, and Canada.
“China’s exports to the Latin American region have increased quite a bit this year, helping offset the declines from the U.S. market,” said Ning Sun, senior emerging markets strategist at State Street Global Markets in Boston, speaking to Bloomberg. “In addition to keeping Americans happy, Mexico also needs to protect its own manufacturing base. I expect Mexico to align its economic and foreign policy with the U.S.”
The tariff hike could also strengthen Mexico’s position ahead of a scheduled 2026 review of the USMCA free-trade deal, originally negotiated during Trump’s first term. Trump has accused Mexico of serving as a back door for Chinese goods entering the U.S. market and last month granted Mexico a temporary reprieve from higher tariffs after a phone call with Sheinbaum.
The automotive sector is particularly sensitive. Mexico has become the world’s largest market for Chinese cars this year, surpassing Russia, according to the China Passenger Car Association. Vehicles currently face tariffs of up to 20% in Mexico — far below the U.S., where Chinese electric vehicles face a 100% tariff and restrictions on software developed in China.
Analysts say Mexico’s tariff increase is both a political and economic calculation. “If the tariffs aren’t high enough to allow Mexican companies to compete in the domestic market, they will be ineffective. It’s also a bit late,” Vanessa Ramírez, managing director at consultancy Ecanal, told Bloomberg.
The policy is also expected to support Sheinbaum’s efforts to narrow Mexico’s budget deficit, which in 2024 widened to its largest since the 1980s as the previous administration ramped up spending on flagship projects. Her government has vowed to avoid sweeping tax hikes, instead focusing on higher collection and revenue from trade measures.
Sheinbaum has already raised duties on some foreign goods, including textiles and direct-to-consumer clothing, while promoting industrial development under her “Plan Mexico,” which emphasizes industrial parks and public spending to attract investment in a volatile global trade environment.
