Mexico weighs tougher trade rules for China, as US talks grind on

Mexico is considering imposing additional trade restrictions on Chinese and other country imports, as reported by four sources familiar with the matter. The proposed anti-dumping measures would align Mexico more closely with the United States while President Claudia Sheinbaum seeks to extend the North American trade pact, USMCA, and boost domestic manufacturing.

The economy and finance ministries are assessing which products not currently covered by a bilateral trade deal might be subject to new duties or higher rates. Specific candidates include steel products and vehicles, according to one of the sources.

While no concrete plan or proposal has been established for implementing new tariff adjustments, the economy ministry is actively consulting with businesses. They are conducting case-by-case investigations into alleged dumping of imports below their production costs, potentially leading to new duties. The finance ministry declined to comment.

In January, Mexico raised tariffs up to 50% on approximately 1,500 product categories from countries without a free trade agreement, as part of Sheinbaum's efforts to protect local producers and ease tensions with US President Donald Trump. The impacted goods included vehicles, car parts, and steel, with Chinese imports facing more repercussions from the import taxes.

The potential trade measures come as the USMCA remains uncertain, following Trump's decision not to renew the deal that grants Mexico preferential access to the US market. This triggered annual reviews instead. Sheinbaum is open to considering the US request for tariffs on Chinese steel and aluminum, which aligns with Washington's efforts to maintain favorable treatment for products from the US, Mexico, and Canada while fostering a unified approach against China.

These plans also aim to bolster Plan Mexico, Sheinbaum's state-led economic development strategy that offers tax breaks and incentives to attract private investment and expand local supply chains. Officials believe that added tariff protection and Plan Mexico incentives can encourage businesses to spend more locally and lessen dependence on Chinese imports.

Steelmakers, textile and apparel producers, and heavy vehicle manufacturers have advocated for stronger protections against low-cost Asian imports, claiming that unfair trade practices have stifled production and cost jobs. Mexico's adoption of tariffs has resulted in a significant drop in selected imports from certain countries, especially China.

In the first five months of this year, the value of Chinese goods covered by the tariffs declined by nearly a third compared to the same period last year, as per data from the economy ministry. The reduction was particularly sharp for Chinese light vehicles, car parts, and footwear, all of which plummeted by over 40%.