digital desk- The world once again seems to be moving towards a tariff war. After huge tariff increase by America on many countries, now Mexico has also taken a big step on the same path. Mexico’s Senate has approved a proposal to impose tariffs as high as 50% on goods imported from major Asian countries like China, India, South Korea, Thailand and Indonesia. This new tariff will be implemented from 2026, which is likely to have a major impact on the trade and exports of these countries. According to the bill passed in the Senate, Mexico is going to increase tariffs on about 1,400 types of imported goods. These include major categories like auto parts, textiles, steel, machinery and electronics. Tariff on many products has also been fixed at 35%. 76 votes were cast in favor of the proposal to increase the tariff, while only 5 votes were cast against it. 35 members remained absent, despite which the resolution was easily passed.
Why did Mexico increase tariffs?
According to the Mexican government, this decision has been taken with the aim of protecting and strengthening its local industries. On the lines of American policy, Mexico also wants to promote domestic production and reduce dependence on foreign imported goods. However, experts say that there are both political and economic reasons behind this step. According to analysts and business groups, this move by Mexico could also be a strategy to satisfy America. The report suggests that Mexico plans to raise additional revenue of about $3.76 billion next year from this tariff increase, so that it can control its growing fiscal deficit. At the same time, business organizations have strongly opposed this move, because it will make imports expensive and may increase prices in the local market.
What will be the impact on India?
India is among those countries which will be directly affected by this tariff increase. However, bilateral trade between India and Mexico has increased rapidly in the last few years. The total trade between the two countries was $11.4 billion in 2022, which will increase to a record level of $11.7 billion in 2024. India’s trade surplus with Mexico is also quite high. In 2024, India exported $8.9 billion, while imports were only $2.8 billion. The tariff increase could have a significant impact on sectors like auto parts, steel, pharmaceuticals, machinery and textiles, which are India’s major export products.
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