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What could be the reasons behind Mexico's tariff move?

13 Dec '25

3 min read

What could be the reasons behind Mexico's tariff move?

Pic: Shutterstock

Insights

Mexico's steep *–** per cent tariffs effective January 1, 2026, will hit over 1,460 products, sharply impacting countries without FTAs.
India's $***–*** million textile, garment, and footwear exports will be significantly affected.
With the USMCA review nearing, Mexico reportedly aims to signal alignment with Washington while also protecting jobs and boosting revenues.

Mexico’s decision to roll out steep new tariffs from January *, ****, has landed like a thunderclap across global trade corridors, and countries without a Free Trade Agreement with it—facing tariffs ranging from * per cent to ** per cent on over *,*** products—are bracing for the impact.

At the centre of that storm also sits India, for which the implications are immediate and uncomfortable. Mexico has become a crucial export destination, particularly for passenger vehicles, with India ranking just behind South Africa and Saudi Arabia. With the new tariff regime kicking in (** per cent from the previous ** per cent), automobile shipments that have carved out a strong presence in the Mexican market suddenly find themselves under pressure, the competitive edge blunted by higher landed costs.