The third wave of Mexican tariffs is drawing closer. Bloomberg, citing informed sources, reported that the Mexican government is evaluating new trade restrictions targeting imports from countries without free trade agreements, with textiles, apparel fabrics, and garments once again listed as priority categories. After two previous rounds of tariff hikes, Chinese textile exports to Mexico have seen significantly higher costs, and some categories have already experienced declines. If the third round materializes, exporters with razor-thin margins will face even harsher survival tests.
Tariffs Escalate, Textiles Bear the Brunt
Mexico's trade protectionism is not a temporary move. In January 2026, temporary tariffs were made permanent, covering 1,463 tariff lines with rates of 10%-50%. Textile tariffs were raised to 25%-35%, with garments up to 45%, affecting imports worth up to $52 billion. In April of the same year, Mexico added tariffs of 5%-35% on 185 additional tariff lines, including apparel, footwear, and textile accessories. The cumulative impact has significantly raised costs for Chinese textiles entering Mexico, and a third round would intensify the pressure.
China is Mexico's largest source of textile and apparel imports, with exports reaching billions of dollars in 2024, accounting for over 30% of Mexico's imports in this category. Many small and medium-sized exporters focus on the Mexican and Latin American markets, relying on high-volume, low-margin orders. Industry data shows that after the tariffs, exports of some categories have declined notably, with basic, bulk products hit hardest. A third round could accelerate this trend, increasing the risk of order losses.
Dual Drivers: External Pressure and Domestic Protection
Mexico's continuous raising of textile import barriers results from both external geopolitical pressure and domestic demands. The United States has long worried about "origin laundering," fearing Asian textiles might transit through Mexico to enter North America duty-free under the USMCA, and has pressured Mexico to tighten management of non-FTA imports. With the USMCA entering its annual review, Mexico aims to align its trade policies with US demands to secure better renewal terms.
Domestically, the tariffs serve President Sheinbaum's "Plan Mexico" national revitalization strategy. The local textile and apparel industry seeks to fend off cheap overseas goods, protect factory jobs, and has repeatedly called for stricter import restrictions. The government hopes high tariffs will reduce external textile imports, encourage domestic investment, and promote import substitution. However, the policy has an inherent contradiction: many Mexican garment factories rely heavily on Chinese fabrics and synthetic accessories, as the local supply chain is incomplete. Tariffs raise the cost of imported fabrics, thereby increasing production costs for local garment factories and weakening their competitiveness—a factor that may temper overly aggressive policies.
Enterprises Under Pressure: Compliance and Upgrading Are Key
For Chinese exporters, a new round of tariffs brings multiple challenges. First, profit margins are squeezed severely. Most fabric and basic garment companies have margins of only 4%-8%. With additional tariffs, they face a dilemma: raise prices and lose customers, or absorb the tariff losses to keep orders. Intermediate products like yarn and greige fabrics are also affected, as Mexican garment factories that buy Chinese greige for processing will reduce procurement if fabric costs rise, shifting orders elsewhere.
Second, customs oversight is tightening. Mexico has strengthened origin verification and cracked down on false declarations, raising inspection rates and increasing risks of cargo delays and detention, further inflating logistics time and capital costs. Previously exploited transshipment or gray-channel routes have largely been blocked, leaving little room for non-compliant operations. Since the proposal is still under consultation, final rates and product lists may change, offering a window for enterprises to prepare.
Practical Recommendations
For Buyers - Review export product tariff codes carefully, calculate cost impacts under different rate scenarios, and include tariff fluctuation sharing clauses in new contracts to mitigate policy risks. - Avoid long-term, large-volume orders; prioritize short-term, smaller orders to maintain flexibility and prevent inventory buildup due to policy changes.
For Trading Companies - Diversify markets by actively exploring Southeast Asia, the Middle East, and Belt and Road countries to reduce reliance on Latin America. - Upgrade product mix by shifting from low-price, high-volume to high-value-added fabrics and functional textiles, enhancing pricing power to offset tariff pressures. - Evaluate supply chain restructuring cautiously, exploring regional co-manufacturing or nearshoring, but strictly adhere to origin rules, avoid gray-channel operations, and maintain compliance.
The North American trade landscape is being reshaped, and trade protectionism has become a norm that exporters must face. Textile enterprises should closely monitor policy developments, prepare contingency plans in advance, and rely on compliance and product upgrades to stabilize their operations amid a complex international environment.