Tariff war widens: After US, Mexico announces up to 50% tariffs on imports from India, other Asian countries

The tariff war triggered by US President Donald Trump seems to be widening, as Mexico has also imposed steep new tariffs on a wide range of imports from Asian nations, marking a sharp break from its long-standing pro-free-trade approach. India is also among the key exporting nations affected by the move. On Wednesday, the Senate of Mexico approved tariff hikes of up to 50% on imports from India, China, and several Asian countries starting next year to boost local industries despite opposition from business groups and affected governments. The proposal, passed earlier by the lower house, will raise or impose new duties of up to 50% from 2026 on goods like autos, auto parts, textiles, clothing, plastics and steel from countries like China, India, South Korea, Thailand and Indonesia not having trade deals with Mexico. The majority of products will face tariffs of up to 35%.

The Senate approved the bill despite opposition from domestic business groups and China. The approved bill is less stringent than an earlier version that stalled in the lower house.

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Attempt to appease the US ahead of trade agreement review?

The move of President Claudia Sheinbaum’s government in Mexico is being seen as an attempt to appease the US ahead of the next review of the United States-Mexico-Canada trade agreement (USMCA). The tariffs are projected to generate $3.76 billion in additional revenue as Mexico seeks to reduce its fiscal deficit.

Mario Vazquez, a senator for the opposition PAN party, said the tariffs will protect jobs as well as certain local productive sectors that are at a disadvantage with respect to Chinese products.

Emmanuel Reyes, a senator from the ruling Morena party who is also chairman of the Senate Economy Committee, said, “These adjustments will boost Mexican products in global supply chains and protect jobs in key sectors.”

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How will Mexico tariffs impact India

Indian exporters have long leveraged Mexico, the second-largest economy in the region and a key North American gateway, as a stepping stone to the US due to its integration in North American supply chains. India had been seeking to boost exports of textiles, auto components, and engineering goods to Latin America.

However, several Mexican import-dependent manufacturers have warned that higher duties on goods from India and other nations will push up production costs and stoke inflation.

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The tariffs will reduce competitiveness in industries like textiles, leather goods, auto parts and steel. They will also push companies to reconsider supply-chain routing through Mexico.

The government in Mexico is trying to align with Washington’s tough stance on Chinese goods, hoping that it helps ease the sweeping US tariffs that have hit Mexico’s own exports of steel and aluminium.