China has launched a formal investigation into Mexico's proposed import tariffs on over 1,400 Asian products, accusing the measures of creating unfair barriers to trade and investment. The probe, announced by China's Commerce Ministry on Thursday, comes amid mounting pressure on Mexico to shield its domestic industries from a flood of low-cost Asian goods—particularly from China—while navigating aggressive U.S. tariff policies under President Donald Trump.
Mexico's government, led by President Claudia Sheinbaum, unveiled the tariff plan earlier this month as part of a broader "Mexico Plan" to bolster local manufacturing and safeguard jobs. The hikes, which could reach up to 50% on items ranging from automobiles and textiles to steel and electronics, aim to protect an estimated 325,000 industrial positions threatened by imports. Current tariffs on these goods average around 16%, but the new rates would push them to the maximum allowed under World Trade Organization rules. Sheinbaum has insisted the move is not a direct response to U.S. demands, emphasizing it as a sovereign effort to foster economic resilience.
However, the timing and scope have fueled suspicions of U.S. influence. Trump administration officials have long accused China of using Mexico as a "backdoor" to circumvent American tariffs, with some Chinese exports rerouted through Mexican factories to enter the U.S. market duty-free under the USMCA trade agreement. Recent U.S. actions, including a 25% tariff on non-North American steel and aluminum entering via Mexico, as well as broader hikes on Chinese goods, have intensified the squeeze. Analysts note that Mexico's imports from China totaled a staggering $130 billion in 2024—second only to its $200 billion-plus trade with the U.S.—making Beijing the hardest hit. Other affected nations include South Korea, Thailand, India, the Philippines, and Indonesia, whose combined exports to Mexico could face billions in additional costs.
Also Read: Super Typhoon Ragasa Devastates Taiwan, Millions Evacuated In China
China's response was swift and pointed. In a strongly worded statement, the Commerce Ministry decried the tariffs as a sacrifice of third-party interests amid "U.S. abuse of tariffs," urging global unity against unilateralism and protectionism. "China firmly opposes any coercion," it declared, warning that the measures would erode investor confidence and harm mutual trade ties. As a counterpunch, Beijing simultaneously initiated an anti-dumping probe into pecan imports from both Mexico and the U.S., targeting a niche agricultural sector that could give Mexico leverage in negotiations. Experts like Even Rogers Pay from Trivium China suggest this bundling of targets is strategic, potentially allowing Mexico to trade concessions on pecans for broader tariff relief in the Chinese market.
It's unclear what concrete actions might follow China's barrier investigation, which could lead to bilateral consultations, WTO disputes, or retaliatory measures like export restrictions on critical minerals used in Mexican auto production. Mexico's Economy Ministry has already pushed back, affirming that all its policies comply with international norms and are driven by domestic needs rather than external pressure. As the probe unfolds, the standoff risks rippling through global supply chains, from electric vehicles—where Chinese brands are gaining ground against Asian rivals—to everyday consumer goods.
This latest chapter in the evolving U.S.-China trade saga underscores the precarious position of allies like Mexico, caught between Washington's protectionist hammer and Beijing's economic gravitational pull. With Trump's tariffs showing no signs of easing and China's export machine humming, the coming months could see further tit-for-tat escalations, potentially reshaping trade flows across North America and Asia. For now, businesses on both sides of the Pacific are bracing for uncertainty, as what began as a defensive Mexican maneuver threatens to ignite a broader conflagration.
Also Read: Boeing Stock Surges After Uzbekistan Dreamliner Order, China Deal Looms