Mexico's trade protectionist policy is tightening again, with a third round of tariff hikes now under evaluation. According to industry public information, Mexico plans to continue raising tariffs on imports from countries without free trade agreements, with textiles, apparel fabrics, and garments again listed as key controlled categories. Two previous rounds have already significantly raised costs for Chinese textile exports to Mexico, and some categories have seen order losses. If the new measures are implemented, they will directly impact tens of thousands of small and medium-sized foreign trade enterprises.
Policy Context: Two Years, Three Rounds, Textiles at the Epicenter
Since January 2026, when Mexico converted temporary tariffs into permanent regulations, the textile industry has been under sustained pressure. The first round imposed tariffs of 10%-50% on 1,463 tariff lines, with textile rates raised to 25%-35% and garments up to 45%, affecting imports worth $52 billion. In April of the same year, Mexico added another 5%-35% tariffs on 185 tariff lines, further covering apparel, footwear, and textile accessories. After two rounds, the overall tariff rate for Chinese textiles entering Mexico has risen sharply, and the third round could push rates even higher.
From a category perspective, yarn, grey fabric, fabrics, and various garments are all included, making the coverage unusually broad. Notably, free trade partners such as the US, Canada, and the EU are exempt, clearly targeting Asian supply chain countries like China, South Korea, India, and Vietnam. This differentiated approach reflects Mexico's attempt to build an exclusive supply chain within the North American free trade framework.
Industrial Impact: Dual Squeeze of Cost Transmission and Order Diversion
China is Mexico's largest source of textile and garment imports, with exports reaching billions of dollars in 2024, accounting for over 30% of Mexico's import share. Many small and medium-sized foreign trade enterprises focus on the Latin American market, with orders characterized by high volume and thin margins, and industry average profit margins only between 4% and 8%. After two rounds of tariffs, exports of some basic products have declined noticeably, with low-margin bulk orders being hit first. If a third round is implemented, companies will face a dilemma between raising prices and losing customers, or absorbing tariffs and taking losses.
The deeper impact lies in supply chain transmission. Mexican local garment factories rely heavily on Chinese fabrics and chemical fiber accessories; higher tariffs raise import costs, pushing up their production costs and weakening their competitiveness. This means high tariffs not only hit Chinese exporters but also backfire on Mexico's local manufacturing. This inherent contradiction may become a factor constraining overly aggressive policies, offering companies a possible buffer.
At the same time, customs supervision is tightening. Mexico has strengthened origin verification in recent years, cracking down on false declarations, with higher inspection rates and increased risks of cargo delays and detention. Past reliance on transshipment and gray customs clearance has been blocked, significantly raising compliance costs. For companies using Mexico as a springboard to the North American market, this means the original channel is narrowing.
Policy Drivers: Overlay of External Pressure and Domestic Industrial Demands
Mexico's continuous raising of textile import thresholds results from a combination of external gaming and domestic industrial protection. Externally, the US has long worried about Asian textiles laundering origin through Mexico to enter the North American market duty-free under USMCA, thus pressuring Mexico to tighten management of non-origin imports. With USMCA entering its annual review cycle, Mexico hopes to align its trade policies with US demands to strengthen its negotiation position for renewal.
Internally, tariffs serve the Sheinbaum government's 'Plan Mexico' national revitalization strategy. Mexico's local textile and garment industry wants to resist low-priced overseas products and protect domestic factory jobs, with industry associations repeatedly calling for stronger import restrictions. The government aims to reduce external textile imports through high tariffs, encourage investment to stay local, and promote import substitution. This interplay of internal and external factors makes trade protection a long-term trend.
Practical Recommendations
Facing continuously rising trade barriers, textile enterprises should shift from passive waiting to proactive planning. The following recommendations are based on the current policy window and are for reference.
For Buyers - Itemize and verify export product tariff codes, mapping yarn, fabric, and garment categories to calculate cost changes under different tariff scenarios for pricing. - Include tariff fluctuation sharing clauses in new contracts, specifying adjustment mechanisms for policy changes to avoid unilateral risk. - Be cautious with long-term bulk orders; place orders in batches to reduce inventory and capital pressure from policy uncertainty.
For Foreign Trade Enterprises - Promote market diversification, actively explore Southeast Asia, the Middle East, and Belt and Road countries to reduce reliance on a single Latin American market and spread order risks. - Optimize product structure, shifting from low-price, high-volume to high-value-added fabrics and functional textiles to enhance pricing power and offset tariff costs. - Prudently evaluate supply chain layouts; capable companies may explore regional cooperative manufacturing or nearby facilities, but must comply with origin rules, abandon gray transshipment, and maintain compliance.
The North American regional trade landscape is being reshaped, and the normalization of trade protection has become a reality that foreign trade enterprises must face. Textile companies going overseas should closely monitor policy developments, prepare plans in advance, and rely on compliant operations and product upgrades to stabilize their business foundations in a complex international environment.