Mexico’s consideration of imposing tariffs on goods imported from China marks a significant turning point in its trade policy, reflecting both domestic economic concerns and broader geopolitical calculations. On September 4, 2025, President Claudia Sheinbaum confirmed that her government was evaluating the introduction of tariffs on countries without formal trade agreements, including China, as part of the broader “Plan Mexico” initiative. The plan is designed to strengthen the domestic industry, reduce reliance on imports, and secure more favorable trade relations. Although the details remain under discussion, the political signal is clear: Mexico is reasserting its economic sovereignty within an increasingly fragmented global trade system.[i]
The decision was built upon recent developments. Reports emerging in late August suggested that Mexico was preparing to increase tariffs on Chinese goods, particularly in sensitive sectors such as automobiles, textiles, and plastics. Although these reports were not officially confirmed at the time, vulnerabilities stemming from Mexico’s heavy dependence on low-cost imports were already recognized within the administration.[ii] This situation followed a period of industrial tension, particularly in border cities such as Ciudad Juárez, where shifts in U.S. trade policy and declining foreign investment had already led to the loss of tens of thousands of jobs. For Mexico, protecting the domestic workforce has become not only an economic necessity but also a political imperative.[iii]
Relations between Mexico and China have historically been complex. Although diplomatic ties were established in 1972, the two countries have since signed numerous agreements in areas ranging from trade and investment to culture and education. Today, China stands as Mexico’s second-largest trading partner, with bilateral trade exceeding 120 billion dollars in 2023. Yet despite the volume of trade, China’s direct investment in Mexico remains relatively modest compared to other partners. At the same time, Mexico hosts a vibrant Chinese diaspora numbering in the millions, which, while fueling resentment among some local producers due to competition in sectors such as manufacturing, also contributes to the country’s cultural life.
The geopolitical dimension is equally critical. Under the provisions of the United States-Mexico-Canada Agreement (USMCA), Mexico is required to inform its North American partners before negotiating trade agreements with countries classified as non-market economies. This provision is widely understood to constrain closer economic integration with China. Consequently, Mexico faces limitations in deepening its ties with Beijing without jeopardizing its core trade relationship with Washington.[iv]
Mexico’s trade patterns are already shifting. By considering tariffs on Chinese goods, Mexico signals its intent to reduce dependence on external competitors while simultaneously reinforcing its position through policy tools that encourage investment in domestic industries. Potential tariffs carry both opportunities and risks. On one hand, they could stimulate local production, promote job creation, and enhance Mexico’s bargaining power in negotiations with the United States. On the other hand, they risk increasing costs for businesses and consumers, particularly in sectors heavily reliant on Chinese inputs. The outcome will depend on whether Mexico can develop competitive alternatives quickly enough to offset these disruptions. Beyond economic considerations, the move has clear geopolitical motivations: to align more closely with U.S. concerns regarding China while simultaneously demonstrating an independent and sovereign approach to trade.
Looking ahead, several scenarios are possible. If the tariffs are implemented, Mexico could further strengthen its position as a nearshoring hub by attracting investments from multinational companies seeking to relocate production from Asia to the Americas. This could reinforce North American supply chains and provide Mexico with greater leverage in negotiations with both Washington and Ottawa. At the same time, Mexico will need to navigate a careful path, protecting its domestic industries while not closing the door to Chinese capital and technology. Over the next decade, the country may emerge as a model of “strategic balancing,” employing selective protectionism, regional integration, and prudent diplomacy to maintain its role both as a North American partner and as a global middle power.
Ultimately, Mexico finds itself navigating a delicate balancing act. Domestically, initiatives such as “Plan Mexico” underscore the importance of industrial renewal and the protection of employment. Regionally, the country must preserve the benefits of deep integration with the United States and Canada under the USMCA while overcoming the constraints such agreements impose on its global partnerships. On the international stage, managing its complex relationship with China—balancing the benefits of trade against the risks of political and security tensions—represents a highly advantageous strategy. In this sense, the proposed tariffs are not merely an economic measure; they serve as a strategic signal of how Mexico intends to position itself as a pragmatic middle power within an increasingly polarized global order.
[i] “Mexico Considering Imposing Tariffs on China, President Says,” Reuters, https://www.reuters.com/world/china/mexico-considering-imposing-tariffs-china-president-says-2025-09-04/, (Accessed: 06.09.2025).
[ii] “Mexico set to raise tariffs on imports from China, Bloomberg News reports”, Reuters, https://www.reuters.com/business/autos-transportation/mexico-set-raise-tariffs-imports-china-bloomberg-news-reports-2025-08-27/, (Accessed: 06.09.2025).
[iii] “In Mexican border town, thousands of jobs lost due to Trump tariffs”, Reuters, https://www.reuters.com/business/world-at-work/mexican-border-town-thousands-jobs-lost-due-trump-tariffs-2025-09-01/, (Accessed: 06.09.2025).
[iv] “US warns China-linked groups may be laundering billions for Mexican cartels”, Financial Times, https://www.ft.com/content/128ef407-d2ff-4882-9d2e-ebb7a3deb108, (Accessed: 06.09.2025).
