Mexico tariff on India: America has already imposed a huge tariff of 50 percent on the import of Indian goods. Out of this, 25 percent tariff has been imposed as a penalty for purchasing oil from Russia. In this sequence, Mexico has also announced to impose 50 percent tariff on many Asian countries including India.
Mexico’s Senate has approved it. The purpose of Mexico increasing the tariff in this way is to strengthen its local industry. Due to this decision of Mexico, up to 50 percent tariff will be imposed on auto, auto parts, textile, clothing, plastic and steel. Apart from this, the tariff on most goods can be increased to 35 percent.
Earlier there was a proposal to increase tariff on 1400 goods
However, this proposal passed in the Senate has been a little softer than the earlier draft, in which it was said that the tariff would be increased on about 1,400 import lines. In the new proposal, duty on two-thirds of these has been reduced. The special thing is that this step has been taken despite the opposition of China and local business groups, which indicates a change in Mexico’s trade policy as it will have to face the upcoming United States-Mexico-Canada Agreement (USMCA) review, which will start from July 1, 2026.
What is USMCA?
USMCA is a free trade agreement between the US, Mexico and Canada, which came into effect from July 1, 2020. According to Article 34.7 of the agreement, it is necessary to review it every six years to ensure that it is beneficial for all three countries. If it passes the review then it can be extended till 2036.
Pressure on local industries will reduce
The Mexican government says that this step will strengthen the domestic industry because the pressure on local companies will be reduced due to cheap imports. But this will deal a severe blow to exporters and local business groups of those countries, who were not expecting the tariff to increase so much. The cost of imports will increase significantly if Mexico increases tariffs. Its impact will be especially severe on those countries which do not have any trade deal with Mexico such as China, India, South Korea, Thailand, Indonesia.
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