After America, now Mexico has also imposed 50 percent tariff on many Asian countries including India. Mexico’s Senate has announced the imposition of tariffs on goods coming from countries with which it has not joined any free trade agreement. Apart from India, the list of these countries includes countries like China, South Korea, Thailand, Indonesia. The new tariff rules will come into effect from January 1, 2026. The tariff rate on some goods will be 50 percent and on most of them it will be 35 percent. Now the question is why a developing country like Mexico, which is itself facing the brunt of tariffs from America, is bent on imposing tariffs on India and other developing countries. Is imposing tariff on India a big mistake? Let us understand it in details.
Regarding tariffs, Mexico’s new government argues that goods coming from Asian countries are causing huge losses to its domestic business. President Claudia Sheinbaum’s government said we need to impose tariffs to protect jobs by boosting our manufacturing. Apart from this, market experts believe that from this tariff the Mexican government can get revenue of about 3.7 billion dollars, which it can use to reduce its deficit.
Trade between India and Mexico
India exported $5.7 billion to Mexico in 2024-25, which is about 1.3% of its total exports. It is clear that higher tariffs will not have a major impact on India’s overall exports, but the challenge is that India’s exports to Mexico are highly dependent on a few selected sectors, and Mexico is also a major buyer of those sectors. In such a situation, the impact of increase in tariff may fall especially on these sectors. For example, motor cars and their parts account for $1.4 billion, or about 25%, of India’s total exports to Mexico. Similarly, export of motorcycles also forms a significant share of about 7%.
Mexico will suffer losses
This decision of Maxi is also being criticized. People familiar with the matter believe that this could affect the global supply chain, increase the costs of manufacturers and deepen trade tensions with other countries. Inflation is also possible to increase due to increase in the prices of raw materials and domestic producers having to import materials from new sources. Along with this, India’s exports worth about 5.7 billion dollars will be affected, due to which it will also have to bear the same brunt.
India supplies a large amount of goods to Mexico, this may affect its trade revenue. Mexico will also suffer loss due to this, it will not be able to get quality products, and if a big business will be affected, it will also suffer loss in revenue. He will be able to recover his losses from tariffs only when trade is conducted properly.
