Mexico is reportedly set to impose tariffs of up to 50% on cars and other goods imported from China and several other Asian exporters as a move to protect local industries and in line with the trend of protectionism in the United States (US).
The tariffs will involve more than 1,400 product categories from countries that do not have free trade agreements with Mexico, including China, South Korea and India.
Meanwhile, goods such as car parts, steel, toys and furniture are also targeted with rates ranging from 10% to 50% depending on the category.
Mexican President Claudia Sheinbaum, through Economy Minister Marcelo Ebrard, stated that the tariffs were allowed by the World Trade Organization (WTO), because goods from these countries arrive at prices considered below “reference prices”, thus harming local producers.
The move is also seen as an effort to restructure Mexico's trade policy ahead of the North American Free Trade Agreement (USMCA) review negotiations, where the US and Canada are not affected by these tariffs due to their membership in the USMCA.
Local automotive dealers have warned that the tariff hike could lead to higher car prices, more limited competition in the domestic market, and fewer consumer choices.
The country's industry will be forced to accelerate efforts to source local components, but economic analysts have stressed that building up the industry's overall capacity and capital will take years, not months.
