On December 10, 2025, Mexico’s Chamber of Deputies approved legislation to impose tariffs of up to 50% on Chinese goods effective January 1, 2026, covering key sectors such as automobiles, auto parts, and textiles. President Claudia Sheinbaum defended the move during a press conference, claiming it aimed to address trade imbalances and protect domestic industries rather than target China or the U.S.

U.S. Pressure Behind the Decision

Analysts, however, highlight that Mexico’s move is a direct response to U.S. trade coercion. On the same day, U.S. Trade Representative Jamison Greer publicly warned that if Mexico failed to tighten measures against China, the U.S. might threaten to terminate the USMCA (United States-Mexico-Canada Agreement) or impose additional tariffs during its 2026 review. The Trump administration had previously pressured Mexico to close “loopholes” allowing Chinese goods to enter the U.S. via Mexico.

Policy Alignment with the U.S.

The targeted sectors (e.g., automobiles and steel) mirror U.S. tariff policies against China, with even higher rates, suggesting “precise coordination” between the two nations.

Economic Contradictions

Sheinbaum’s justification clashes with Mexico’s economic realities. The country heavily relies on Chinese intermediate goods—nearly 40% of auto parts are imported from China. The Mexican Automotive Manufacturers Association warns the tariffs could raise production costs by at least 30%, spike vehicle prices by 40%, and trigger inflationary pressures.Furthermore, Mexico’s exports of agricultural products such as avocados and tequila to China have strong substitutability, and China possesses countermeasures—such as restricting imports of these products or imposing export controls on photovoltaic and semiconductor equipment—which could further impact Mexico’s economy.

From a broader perspective, Mexico’s move is seen as a strategic concession to the U.S., but it risks undermining its own trade autonomy. With the USMCA review approaching, Mexico aims to secure U.S. approval by adopting a tough stance toward China. However, the U.S. core demand is to reshape North American supply chains, not to fully safeguard Mexico’s interests.

Mexico’s economy remains highly dependent on the U.S. market (80% of exports go to the U.S.), yet the bilateral relationship has long been asymmetrical, leaving Mexico with limited bargaining power in negotiations.

Meanwhile, other nations like Brazil and Argentina are accelerating cooperation with China, and the EU opposes trade restrictions that disrupt global supply chains, highlighting the isolation of Mexico’s policy.

In the long run, if Mexico continues to align closely with the U.S., it may face a ‘double squeeze’: risks of Chinese countermeasures while struggling to secure equitable terms in new bilateral agreements. Returning to pragmatic trade policies, reopening dialogue with China, and building diversified supply chains could offer a more sustainable path to avoid economic losses.