Sheinbaum’s China Tariff Plan Postponed as Backlash Builds
Mexican Manufacturers Warn Proposed Tariffs Would Sharply Raise Production Costs
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President Claudia Sheinbaum’s plan to impose steep tariffs on Chinese imports has been delayed until at least December as mounting opposition from Mexico’s private sector and even members of the ruling party stalls congressional debate, according to lawmakers and business leaders.
Mexican manufacturers warn the proposed tariffs would sharply raise production costs, given their heavy dependence on Chinese imports for machinery, components and raw materials.
The measure would hit competitiveness at a time when industries are already under pressure from higher input prices, said a person from the manufacturing sector involved in ongoing talks with the government, who asked not to be named.
Some legislators of the ruling coalition led by Sheinbaum’s Morena party have also voiced unease, arguing that now is not the right time to provoke a trade dispute with China. While many lawmakers back Sheinbaum’s efforts to safeguard domestic industries and strengthen ties with the U.S., others stress the need to maintain and diversify trade relationships with key partners like China.
Sheinbaum’s office declined to comment on the delay, adding that any announcements will be made at her daily morning news conference.
A worker cuts a stainless steel sheet at a steel manufacturing facility in Mexico City. (Mauricio Palos/Bloomberg)
Her administration sent the tariff proposal to Congress in early September, seeking to impose levies on more than 1,400 categories of imported products from China and other Asian nations — including cars, auto parts, steel, toys and furniture — at rates ranging from 10% to 50%.
Discussions are ongoing over which categories should be targeted in a bid to reduce impacts on local industries, according to officials familiar with the talks.
Economy Minister Marcelo Ebrard framed the initiative as an effort to shield Mexican producers from what he described as “unfair competition,” arguing that a surge of low-cost Chinese goods is flooding local markets. Officials have also portrayed the measure as a way to strengthen Mexico’s negotiating hand ahead of the scheduled 2026 review of the USMCA regional trade pact.
“The government is reviewing our trade relationships with countries that lack free-trade agreements with Mexico,” Morena lawmaker Fernando Castro Trenti said, echoing Sheinbaum’s own past language on the tariff push. Trenti is a member of the lower house’s finance committee.“The goal isn’t to close doors, but to re-balance trade relations and ensure fair conditions for Mexican industry.”
Beijing responded swiftly to Sheinbaum’s plan. China’s Ministry of Commerce launched a trade barrier investigation, warning that unilateral tariff hikes by Mexico would “harm the interests of China and other trading partners, seriously undermine the predictability of Mexico’s business environment, and weaken investor confidence.”
The move added diplomatic pressure on Mexico, already navigating sensitive trade negotiations with both Washington and Beijing following the recent APEC summit, where Ebrard met with U.S. officials, including Trade Representative Jamieson Greer.
Congressional Hurdles
Despite Morena’s majorities in both chambers, the proposal has struggled to advance. Lawmakers are prioritizing Sheinbaum’s water and health initiatives before the current legislative session ends on December 15. If not addressed this year, debate will resume in February, according to Castro Trenti.
“It has to be this year,” said Sen. Waldo Fernández, the ruling coalition’s chair of the USMCA committee. “We’re deeply concerned for our national industry which has been undermined by unfair competition.”
The tariff plan faces technical challenges. Mexico’s finance and economy ministries disagree on which products should be targeted, complicating discussions with the private sector, according to people with knowledge of the matter. Disagreements among Mexican companies themselves — unable to present a united counterproposal — have further slowed progress.
Lawmakers are also evaluating the possible impact of the levies on inflation, according to Morena lawmaker Alfonso Ramírez Cuéllar, who remains optimistic that the proposal could be approved in December.
Others argue that even if the plan succeeds in protecting some local industries, it would at the same time harm Mexican companies that depend on cheaper Chinese inputs. Kenneth Smith, Mexico’s top technical USMCA trade negotiator when the pact was agreed to in 2020, described the plan as using a “shotgun” approach.
“You put a lot of countries and companies in the crossfire,” Smith said at an economic forum in Mexico City.
The tariff plan was originally included in the government’s 2026 budget, whichpassed last week, but later separated from that package to allow more time for consultations.Some industry representatives expect a resolution by early next year if a consensus can be reached.
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