Mexico has opened a new trade front against India just as global tariff tensions rise, approving steep import duties of up to 50% on a wide range of goods from India, China, South Korea, Thailand, and Indonesia. The tariff package, passed by Mexico’s Senate, will take effect on January 1, 2026, and applies to countries that do not have a trade agreement with Mexico. Items such as automobiles, auto components, textiles, plastics, and steel will be hit with the highest duties. The measure is expected to generate nearly $3.76 billion in additional revenue for Mexico next year.
Although the Mexican government has presented the tariff hike as an effort to strengthen domestic manufacturing, analysts say the timing and scale indicate a strategic move to appease US President Donald Trump. With the upcoming review of the US-Mexico-Canada Agreement (USMCA) and Washington’s increasing pressure on Mexico over trade, immigration, and narcotics trafficking, President Claudia Sheinbaum appears eager to avoid further friction with the US. In recent months, Trump has repeatedly threatened new tariffs on Mexican steel, aluminium, and agricultural products, and has criticised Mexico’s handling of fentanyl smuggling and water-sharing obligations.
The new tariff structure is expected to significantly affect India–Mexico trade, which reached an all-time high of $11.7 billion in 2024. India enjoys a major trade surplus with Mexico, exporting about $8.9 billion worth of goods, particularly passenger vehicles, auto parts, and motor cars—precisely the categories now facing heavy duties. As a result, Indian exporters could see a steep decline in competitiveness in the Mexican market, and bilateral trade growth may slow or reverse in the coming year.
Mexico’s decision, coming shortly after the US imposed similarly high tariffs on Indian goods, highlights the growing vulnerability of India’s export-driven sectors in an increasingly protectionist global environment. With two major Western economies now imposing up to 50% tariffs, New Delhi may need to recalibrate its diplomatic and trade strategies to manage mounting external pressure.
