Mexico Raises Tariff Heat On China To Defend Factories, Keep Trump Happy: Report

The draft revenue proposal from President Claudia Sheinbaum’s administration is scheduled to be sent to Congress by Sept. 8.

The Mexican government is reportedly planning to raise tariffs on imports from China as part of its 2026 budget proposal next month in a bid to protect domestic industries and appease the Trump administration.

According to a Bloomberg News report, citing people familiar with the matter, Mexico plans to increase tariffs on imports, including cars, textiles, and plastics. The draft revenue proposal from President Claudia Sheinbaum’s administration is scheduled to be sent to Congress by Sept. 8.

The move, aimed at shielding Mexican businesses from subsidized Chinese imports, is likely to face little opposition in Congress, as Sheinbaum’s party and its allies hold two-thirds majorities in both houses.

According to Mexican government data, the country imported goods worth $51.4 billion from China, accounting for nearly 20% of its total imports.

Retail sentiment on Stocktwits iShares MSCI Mexico ETF (EWW) was in the ‘bullish’ territory at the time of writing.

Since early this year, the Trump administration has urged Mexico to increase tariffs on Chinese imports, similar to those imposed by the U.S. The Republican President has accused Chinese firms of using Mexican soil to ship their goods into the U.S. and avoid tariffs.

For example, Chinese electric vehicles face levies of up to 100% in the U.S., but in Mexico, they face a tariff rate of only 20%.

According to the report, Sheinbaum’s administration has proposed a concept called “Fortress North America,” which would limit shipments from China while strengthening trade and manufacturing ties among the US, Mexico, and Canada. The idea has garnered support from the U.S. Treasury Secretary Scott Bessent.

U.S. and Mexico also intend to review the free-trade deal between them, negotiated during Trump’s first term, by the middle of next year. Last month, Trump put additional tariffs on Mexico on hold after a phone call with Sheinbaum.

The iShares MSCI Mexico ETF has risen 31% this year, compared with a 9.7% rise in the SPDR S&P 500 ETF Trust (SPY).

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