Mexico City – December 12, 2025 – China sharply criticized Mexico on Thursday, urging the government to immediately reverse sweeping tariff increases on more than 1,400 product lines from Asia that were approved by Congress just hours earlier and are set to take effect on January 1, 2026.
The Mexican Senate passed the bill late Wednesday in a 76-5 vote, with the lower house having approved it earlier the same day. The legislation raises duties up to 50% on a wide range of goods including automobiles, auto parts, steel, textiles, footwear, appliances, plastics, toys, and electronics. The tariffs apply exclusively to countries that do not have free trade agreements with Mexico — most notably China, India, South Korea, Thailand, and Indonesia.
President Claudia Sheinbaum defended the measure at her morning press conference on Thursday, insisting it is designed to “support domestic production and protect Mexican jobs” in industries that have been overwhelmed by low-cost imports. Economy Minister Marcelo Ebrard added that the final version of the bill significantly softened the original proposal, reducing duties on two-thirds of the affected items to minimize disruption to supply chains.
Beijing responded almost immediately. In an official statement released Thursday morning, China’s Commerce Ministry called the hikes “unilateral and protectionist,” stating that China “consistently opposes unilateral tariff increases in any form.” The ministry emphasized the importance of China-Mexico economic relations and urged both sides to strengthen dialogue, warning that the measures would harm companies and consumers on both sides.
The ministry also revealed that it had formally launched a trade and investment barrier investigation against Mexico at the end of September and that the probe remains active. Analysts interpret this as a clear signal that Beijing is preparing possible retaliatory measures, which could target Mexican exports such as copper ore, avocados, tequila, or automotive components.
Trade between the two countries is heavily imbalanced: Mexico imported $129.79 billion worth of goods from China last year while exporting only about $9.93 billion, creating a deficit of nearly $120 billion. Chinese products dominate many of the categories now facing higher duties, from smartphones and laptops to clothing and household appliances.
The timing of the tariff decision has drawn particular attention because it comes just days after U.S. President Donald Trump renewed threats against Mexico. On December 8, Trump posted on Truth Social that he would impose an additional 5% tariff on all Mexican exports unless Mexico immediately releases 200,000 acre-feet of water owed to Texas under the 1944 Water Treaty. He accused Mexico of “very unfair” non-compliance that is devastating American farmers and ranchers.
The United States is by far Mexico’s largest trading partner, with bilateral trade exceeding $334 billion annually. Many observers believe the new Asian tariffs are at least partly a strategic move by the Sheinbaum administration to demonstrate willingness to curb Chinese imports — a long-standing U.S. demand — in hopes of easing pressure from Washington on trade, migration, and now water issues.
Mexican business groups have expressed alarm. The automotive sector, which produces over 3.5 million vehicles a year (most for export to the U.S. and Canada), warned that higher costs for Asian components such as batteries and electronic modules could raise production prices and jeopardize jobs. Consumer advocates added that everyday goods from clothing to televisions will become noticeably more expensive for Mexican families.
Opposition politicians and some ruling-party lawmakers acknowledged the revenue potential — estimates suggest the tariffs could generate up to $3.76 billion next year to help close the fiscal deficit — but urged the government to use the funds transparently and avoid a broader trade war.
President Sheinbaum left the door open for negotiation, saying Thursday that Mexico remains willing to review specific tariff lines with affected countries, including China. However, she made clear there are no plans to withdraw the overall package.
As 2025 draws to a close, Mexico finds itself caught between two superpowers: facing retaliatory threats from Beijing over protectionism and renewed tariff threats from Washington over water. With the USMCA joint review scheduled for 2026 and global trade tensions showing no sign of easing, the coming weeks will test whether Mexico City can navigate this diplomatic and economic minefield without triggering a wider confrontation.
