Mexico’s Big Tariff Shake-up
50% Duties on Apparel, Footwear & Textiles from Asia
Recently, Mexico proposed sweeping import tariff increases — up to 50% — on more than 1,400 product categories from China and other Asian countries.
These products include light vehicles, auto parts, electronics, plastics, textiles, footwear, toys, etc. The tariffs are being applied only to countries without free trade agreements with Mexico. Key impacted countries are China, India, South Korea, Thailand, Indonesia, Turkey, etc.
The government frames the move as being about protecting domestic industries and jobs from low-priced imports (especially when goods are sold below “reference prices”). It is also being viewed as a response (or at least in context) to pressure from the U.S. to limit Chinese imports and economic influence.
About 8.6% of Mexico’s total imports will be affected. Also the government projects that this could protect about 325,000 jobs in related industries.
The plan still needs approval from Congress but it has strong backing due to the government’s majority.
Why Mexico Is Doing This
Here are the main drivers:
Domestic Industry Protection
Mexico has seen competition from low-cost imports that may displace local production in textiles, footwear, apparel, auto parts, etc. Raising tariffs is a way to level the playing field and give domestic producers breathing room.Addressing “Dumping” / Pricing Below Reference Prices
Officials claim that some imports are priced so low they undermine domestic firms. The tariff increases are partly justified as counter-measures.Geopolitical & Trade Relationship Pressure
Mexico is under pressure from the US to reduce its import exposure to China, especially in sectors like automobiles. There’s concern from the U.S. that China may be using Mexico as a backdoor to evade tariffs. Mexico appears to be using the tariff policy in part to respond to that pressure and perhaps to gain leverage or secure favorable trade treatment from the U.S.Protecting Jobs
Officials estimate up to ~325,000 jobs in automotive, textiles, footwear, etc., are at risk from import competition. The tariffs are pitched as a way to safeguard those.Legal & WTO Constraints
Mexico is pushing tariffs to the maximum levels allowed under WTO rules in some cases (e.g. cars from China) while still arguing that these moves are consistent with Mexico’s trade obligations.
What This Means for Apparel, Footwear, and Textiles
These sectors are particularly exposed, and will see substantial impacts:
Cost increases for imports of inputs and finished goods from Asia — higher tariffs will push up landed costs.
Supply chain reconfigurations: Brands, retailers, manufacturers might shift sourcing away from Asian countries without FTAs toward countries that do have FTAs with Mexico (or more local suppliers), to avoid tariffs.
Domestic industry boost: Local textile, apparel, and footwear manufacturers may see a window to gain market share, if they can compete on quality, delivery, etc.
Risk of inflation: Higher prices for imported clothing, footwear, textile raw materials could be passed onto consumers.
Trade partner tensions: Countries impacted may push back, seek adjustments or challenge under international trade laws. China has already criticized the move as protectionist.
Potential Risks & Challenges
Implementation, enforcement, and unintended consequences: Tariffs often lead to complications: evasion, transshipment, trade diversion.
Inflationary pressure: For consumers and industries that rely on imported inputs.
Retaliation or diplomatic friction: China and others may respond via trade measures, complaints at WTO, etc.
Competitiveness of domestic producers: Increased protection doesn’t guarantee success if domestic players lack economies of scale, or face other cost disadvantages.
Supply constraints or quality gaps: Local capacity to supply everything needed in footwear, textiles, etc., may be limited in certain product lines.
Broader Implications
For global apparel & footwear trade: This could accelerate shifts in sourcing hubs. Countries with FTAs with Mexico or nearshore suppliers may see increased demand.
For nearshoring and regional production: Mexico may attract investment in textile/apparel manufacturing, especially for goods for the domestic Mexican market or for export to the U.S. under USMCA.
For trade policy norms: Raises questions about how WTO rules are interpreted with respect to large tariff increases for countries without FTAs, especially when “maxing out” on tariffs is used.
For supply chain resilience: Brands may have to rethink risk exposure to tariff policy shifts, favor diversified sourcing, or more local content.
Bottom Line
Mexico’s proposed moves represent a major pivot in trade policy, especially for sectors like apparel, footwear, and textiles. On one hand, they reflect understandable aims: protecting jobs, building local industry, responding to unfair pricing. On the other, they risk raising costs, straining diplomatic and trade relationships, and may have mixed results if domestic industries aren’t ready to scale or compete.
For businesses in these sectors, now is the time to:
Audit reliance on Asian imports from countries without FTAs with Mexico
Explore alternate sourcing strategies (local, regional, or from FTA partners)
Plan for cost pass-through or absorption, depending on pricing power
Monitor legislative and WTO developments
If you like, I can write a version of this for apparel businesses specifically operating in Latin America (or for U.S. firms sourcing from Mexico) to help with strategy. Want me to do that?
For Further Reading:
Mexico to raise tariffs on cars from China to 50% in major overhaul
Mexico to slap 50% tariff on Chinese cars under US pressure
Mexico's new tariffs on Asian imports aim to counter US trade pressures