Mexico also applies tariffs
Last week, the Senate approved an increase in tariffs of up to 50% on products imported from China and other Asian countries in order to strengthen domestic production and address trade imbalances.
Among the products that will be affected are automobiles, auto parts, textiles, clothing, plastics and steel from China, India, South Korea, Thailand and Indonesia.
Experts warn that the tariffs could disrupt critical supply chains at a time when the Mexican economy, the second largest in Latin America, has virtually come to a standstill. The industries most at risk are electronics and automotive, which rely heavily on Chinese parts.
And lives under siege by Trump
Since becoming president last January, Donald Trump has kept Mexico in his sights with the application of new tariffs due to differences in trade and security issues. However, Claudia Sheinbaum’s government has managed to maintain dialogue with its American counterpart to avoid the imposition of high tariffs and therefore a negative impact on bilateral trade.
U.S. Trade Representative Jamieson Greer recently stated that Canada and Mexico should not be used as export hubs for China, Vietnam, Indonesia and other countries, noting that this was already happening in some cases in Mexico.
Last April, after the US Department of Commerce announced that it was going to exit a 1996 agreement to suspend tariffs on Mexican tomatoes, President Claudia Sheinbaum warned that there were two antidumping investigation processes that could be activated on two US products: chicken and pork.
This Monday, Mexico began an antidumping and antisubsidy investigation into imports of pork leg and shoulder from the United States, at the request of several companies that denounced unfair international trade practices.
What are tariffs?
They are a tax or levy that a country imposes on imported (and sometimes exported) goods and services when they cross an international border.
Tariffs are a fundamental tool in trade policy and are used both to generate tax revenue and to protect local industries from foreign competition.
Which ones apply in Mexico?
Currently, Mexico has the most important free trade agreement in the T-MEC. It is the main trading partner of the United States and exports products worth more than $420 billion a year to this country, with thousands of products free of tariffs.
However, it also has trade relations with other countries, such as China, to which it exports 12.7 billion dollars a year, Taipei and South Korea. And with none of these countries does it have a free trade agreement comparable to the T-MEC. Therefore, most of these exports are subject to various types of tariffs.
The majority of products imported by Mexico come from the United States (79.6%) and Canada (3%), according to data collected by Statista. But there are other important countries for imports such as China, Germany, Brazil or Japan. The payment of tariffs on these imported goods impacts the final price of the products and thus affects the final consumer.
Types of tariffs
The World Trade Organization (WTO) categorizes tariffs according to their nature and how they affect trade policies. These categories are aligned with the principles of the multilateral trading system, which seeks transparency, predictability and non-discrimination. The types of tariffs recognized by the WTO can be classified according to the following criteria:
According to its nature or calculation
Ad valorem:
They are based on a percentage of the value of the merchandise. Example: 10% of the import price.
Specifics:
They are established as a fixed amount per unit (weight, volume, quantity, etc.). Example: $50 per ton.
Mixed:
They combine both elements: an ad valorem rate plus a specific component.
Example: 5% of the value plus $20 per unit.
According to its purpose in commercial policies
Consolidated:
They are maximum tariffs that WTO member countries agree not to exceed.
They are set out in the lists of concessions and commitments negotiated between members.
Applied:
They are the tariffs that a country actually uses in its commercial operations.
These are usually lower than the bound ones to encourage trade.
Preferential:
They are reduced or eliminated tariffs that are granted within the framework of preferential agreements (for example, free trade agreements or agreements between developing countries).
They are allowed under specific exceptions to WTO rules, such as the Generalized System of Preferences (GSP).
Most Favored Nation (MFN) Tariffs:
They apply to all WTO member countries, ensuring that none receives less favorable treatment than others.
Example: If a country applies an 8% tariff to one member, it must apply the same to the others, subject to exceptions (such as preferential agreements).
Prohibitive:
Although technically allowed if they are within the consolidated levels, they are so high that they deter imports, functioning as an indirect barrier.
According to your specific purpose
Antidumping Tariffs:
They are imposed as a corrective measure when it is determined that a product is being sold below its production cost in the import market.
They seek to protect the national industry from unfair practices.
Compensatory Tariffs:
They are applied to products that receive subsidies in the exporting country, to level out competition.
Safeguard Tariffs:
They are temporary measures applied to protect a local industry from a sudden and harmful increase in imports.
