Mexico formalizes and expands import tariffs to more than 1,400 products—key impacts for the automotive sector and beyond

Alert

29 December 2025

6 min read

On December 29th, a reform to the Mexican Import Duties Act¹ was published in the Official Gazette of the Federation.

Overview

As foreseen since the legislative initiative was introduced by the executive in September 9, 2025², Mexico's latest legislative reform to the Law of the General Import and Export Taxes (LIGIE) seeks to:

Strengthen the domestic industry by incentivizing local production and reducing reliance on imported goods, especially from countries without a free trade agreement (FTA) with Mexico;
Promote reindustrialization and increase national value-added content in strategic sectors, including among others, automotive, textiles, steel, and plastics;
Protect employment and supply chains by shielding domestic producers from foreign competition, particularly where imports are perceived as unfairly priced or subsidized; and
Respond to global trade dynamics and vulnerabilities exposed by Mexico's integration into global value chains, which have not yielded the expected technological development or domestic value addition.

The reform is explicitly aligned with Mexico's National Development Plan and is presented as a strategic, not merely fiscal, use of tariff policy. The government asserts that these measures are consistent with Mexico's international trade obligations, and that preferential rates for FTA partners (such as the USMCA/T-MEC) remain unchanged for qualifying goods.

China, South Korea and India have already expressed concerns. China has announced a "a trade and investment barrier investigation against Mexico"³ considering it a protectionist measure and President Sheimbaum responded that this tariff increase is not aimed against China⁴ or any particular market.

Comparison to previous tariff measures

MFN rate increase

These new tariffs increase affect more than 1,400 products corresponding to different sectors, such as light vehicles, textiles, home appliances, plastics, steel, aluminum, paper, glass, among others. The increases range from 5% to 50%, depending on the product category.
Previous executive decrees

In 2023 and 2024, Mexico's executive branch raised tariffs on a broad range of products—including finished vehicles, textiles, footwear, and steel—via decrees published in the Diario Oficial de la Federación.⁵ These increases affected imports from non-FTA countries, notably China, and were justified as temporary, urgent measures under the executive's constitutional authority.
Current legislative reform

The new legislative action consolidates these executive measures, making them permanent and expanding coverage to additional tariff lines and sectors. It affects 1,463 tariff lines, including many that were not previously subject to tariffs or had lower rates. Of these, 316 lines were previously duty-free, and others now face increased rates.

Duties will apply to imports from every country, unless preferential treatment under an FTA is applied.

Sectorial impact

The reform introduces or increases tariffs for plastics, steel, appliances, aluminum, toys, furniture, leather goods, paper and cardboard, motorcycles, trailers, and glass—many of which were not previously covered by the executive decrees.

In contrast, sectors like textiles, footwear, and apparel were already covered by previous executive action, and the legislative reform largely formalizes those tariff increases.

Automotive

One of the most notable changes is the significant tariff increase on finished vehicles, although the reform is a legislative consolidation of existing measures. For parts and components, it introduces both new tariffs and increases, broadening the scope of protection for the domestic industry.⁶

Chapter 87 covers motor vehicles, tractors, cycles, and other land vehicles, as well as their parts and accessories. The document shows that the tariffs for finished automobiles and cargo vehicles (for example, 8704.21.99, 8704.31.99, 8704.41.99, 8704.51.99, 8704.60.02) were also set at 50%. However, many auto parts and components within the same chapter have lower tariffs, for example, 7%, 10%, 25%, 36%, etc.

Specifically, the import tariff for finished passenger vehicles (e.g., 8703.22.99, 8703.23.99, 8703.24.99, 8703.32.99, 8703.33.99, 8703.40.99, 8703.60.99, 8703.80.01) is set at 50%. This matches the rate established by previous executive decrees for non-FTA countries and is now formalized in law. There is no further increase for these lines, but the measure is now permanent and legislative.
Similar 50% tariffs apply to various trucks and electric vehicles (e.g., 8704.21.99, 8704.31.99, 8704.41.99, 8704.51.99, 8704.60.02), again formalizing previous executive action.
Many automotive parts and components (e.g., 8708.x, 8409.x, 8511.x, 8512.x) now face tariffs ranging from 7% to 36%. Some lines were previously duty-free or had lower tariffs; these now face new or higher rates. The reform thus expands tariff coverage within the automotive supply chain.

Entry into force

These new rates will entry into force on January 1st, 2026, and their validity will be indefinite, it's not limited to a specific term.

Conclusion and potential impact

The amendment to the LIGIE as discussed by Congress, justifies the measures as necessary for industrial policy, employment protection, and economic sovereignty. However, it also acknowledges that the increases are targeted at imports from countries with which Mexico does not have an FTA—China, South Korea, India, Vietnam, Thailand, Brazil, Indonesia, Chinese Taipei, UAE, and South Africa as major sources of affected imports.

The reform discussed by Congress asserts that it is consistent with Mexico's WTO and FTA commitments, as preferential rates for FTA partners remain unchanged. However, the explicit targeting of non-FTA countries and the breadth of the increases could be subject to scrutiny and unilateral reactions.

The reform has a direct and significant impact on imports from China, as China is one of the largest non-FTA suppliers to Mexico in the affected sectors, particularly automotive, electronics, and consumer goods.⁷

Companies sourcing from non-FTA countries, especially China, will face higher and more permanent tariff barriers, and should anticipate increased costs and consider reviewing supply chain strategies. It is also advisable to assess the impact of these changes on cost structures and renegotiate contracts where necessary.

The reform last transitory article also provides, however, that the Ministry of Economy may take action as follows:

"Fourth. With respect to the tariffs introduced under this reform, and in order to ensure the supply of inputs in Mexico under competitive conditions, the Ministry of Economy may implement specific mechanisms and corresponding legal instruments for the importation of goods originating in countries with which the Mexican State does not have Free Trade Agreements in force."

White & Case is closely monitoring the implementation of these tariff increases. Our team is available to assist with product classification reviews, supply chain impact assessments, and compliance strategies.

For further information or tailored advice, please contact your usual White & Case representative or the authors above.

_{1 Available in Spanish at Diario Oficial de la Federación,}_here_{.
2 See White & Case Trade Alert:}_{Mexico proposes significant customs and tariff reforms as part of the 2026 Economic Package | White & Case LLP}₃_{Commerce Ministry: China opposes Mexico's tariff hikes, urges correction of protectionist move}_{4 See}_{China reclama a México por aranceles y Sheinbaum responde: 'No está dirigido a ustedes' – El Financiero}_{5 See}_{White & Case Trade alerts: Mexico reinstates tariff hikes ranging from 5% to 50% on over 544 goods | White & Case LLP}_/_{Mexico Imposes Temporary Import Duties up to 25% on more than 588 non-FTA Tariff Items | White & Case LLP}_{6 The Mexican Automotive Industry Association (AMIA) supports imposing tariffs on finished vehicles imported from countries without an FTA with Mexico (including China), framing it as a measure to protect and strengthen domestic vehicle production and investment in Mexico. At the same time, it urges caution for the broader decree (inputs/autoparts) and warns that uncertainty (T-MEC review and US tariffs) could keep investments largely on hold in 2026 See news}_report_{.
7 See:}_{China: Foreign trade, investments, migration and remittances | Data México}

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_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}