Mexico weighs China duties amid trade pact review

Mexico is weighing plans to impose further trade restrictions on selected products from China and other countries while raising existing import taxes on others, according to four people familiar with the matter.

The so-called anti-dumping measures would deepen Mexico’s alignment with Washington as President Claudia Sheinbaum pursues a multiyear extension of the North American trade pact known as the U.S.-Mexico-Canada Agreement while also supporting her push to grow domestic manufacturing at a time of lackluster investment at home.

Mexico’s economy and finance ministries are evaluating which products not currently covered by a bilateral trade deal might face new duties and which could be subject to higher rates. Steel products and vehicles are among the leading candidates, according to one of the people.

There is currently no concrete plan or proposal to implement new tariff adjustments, the economy ministry said in a statement. But the ministry, which oversees foreign trade, said it is engaged in ongoing consultations with businesses similar to those that led to the design of a tariff package targeting Asian imports that was implemented earlier this year.

It said it would continue case-by-case investigations into alleged dumping of imports below their production costs, which could lead to the imposition of new duties.

The finance ministry declined to comment.

In January, Mexico raised tariffs as high as 50% on roughly 1,500 categories of products from nations that have not signed a free trade deal with it, part of Sheinbaum’s efforts to protect local producers as well as ease tensions with U.S. President Donald Trump. The affected products included vehicles, auto parts and steel, with Chinese imports more affected by the import taxes.

The new trade measures under consideration come as the U.S.-Mexico-Canada Agreement hangs in the balance after Trump decided not to renew the deal that underpins Mexico’s preferential access to the U.S. market. That set in motion rolling annual reviews instead.

The Trump administration has asked the Mexican government to adopt tariffs on Chinese steel and aluminum that mirror duties Washington has imposed under Section 232 of U.S. law. The request marked an attempt to preserve more favorable treatment for products from the U.S., Mexico and Canada while building a common policy toward Beijing.

Sheinbaum is open to pursuing that request as part of the U.S.-Mexico-Canada Agreement review, Bloomberg reported last month.

The plans under consideration also aim to strengthen Plan Mexico, Sheinbaum’s state-led economic development blueprint that includes tax breaks and other incentives meant to lure private investment and expand local supply chains.

Officials are betting that added tariff protection and Plan Mexico incentives can spur businesses to spend more locally while reducing dependence on Chinese imports.

Steelmakers, textile and apparel producers, and heavy-vehicle manufacturers have pushed for stronger protections from low-cost Asian imports, alleging that unfair trade practices have undercut production and cost jobs.

Mexico’s embrace of tariffs has led to a sharp decline in selected imports from some countries, particularly China, which does not have a free trade deal with Mexico. During the first five months of this year, the value of Chinese goods covered by the tariffs fell by nearly one-third from the same period last year, according to data provided by the economy ministry.

The slide was especially pronounced for imports of Chinese light vehicles, auto parts and footwear, all of which dropped more than 40%, underscoring the shift in trade flows since the Mexican tariffs took effect.