After US tariffs, Mexico hits India with 50 percent duties on key imports

The new tariffs, aimed at protecting domestic manufacturers, will come into effect on January 1, 2026.

According to Mexican daily El Universal, the duties will apply to dozens of product categories such as auto parts, small cars, steel, plastics, textiles, toys, footwear, furniture, household appliances, leather goods, perfumes, cosmetics, paper, aluminium, motorcycles, trailers, soaps and glassware.

The move will affect countries that do not have a trade agreement with Mexico, including India, China, South Korea, Thailand and Indonesia.

Why is Mexico raising tariffs?

Mexico, which has a massive trade imbalance with China, is attempting to reduce its dependence on Asian imports and boost local industrial output. China alone exported goods worth $130 billion to Mexico in 2024.

Beijing reacted sharply, saying it “opposes unilateral tariff hikes in all forms” and urged Mexico to “correct its wrong practices” of protectionism.

The Mexican government expects the new levies to generate about $3.8 billion (₹33,910 crore) in additional revenue.

President Claudia Sheinbaum has positioned the tariffs as part of her broader push to strengthen domestic industry and create jobs.

“We believe that supporting Mexican industry is to create jobs,” said Deputy Ricardo Monreal, leader of the ruling Morena party in the Chamber of Deputies.

However, analysts quoted by El Financiero believe the tariff move also aims to curry favour with the US ahead of the United States–Mexico–Canada Agreement (USMCA) review.

Impact on India

The tariff surge will severely hit India’s automobile exports, particularly for companies like Volkswagen, Hyundai, Nissan and Maruti Suzuki that ship large volumes to Mexico. According to Reuters, about $1 billion worth of Indian shipments will be affected.

Import duty on cars will jump from 20% to 50%, a move that industry groups say will significantly erode competitiveness.

In a letter to the Commerce Ministry before the tariffs were finalised, India’s automobile industry urged the government to intervene with Mexico, calling the decision a direct blow to exports.

Mexico is India’s third-largest market for car exports, behind South Africa and Saudi Arabia, making the tariff hike a major setback for the sector.