Mexico's trade protectionism is escalating again. According to sources, the government is evaluating a new round of tariffs on imports from countries without free trade agreements, with textiles, apparel fabrics, and garments again listed as priority categories. Previous rounds have significantly raised costs for Chinese textile exports to Mexico, and a third round would deepen cost pressures and order losses for domestic textile trading companies.
Escalating Tariffs: Textiles Bear the Brunt
Since 2026, Mexico has implemented two major tariff adjustments. The first, effective January 2026, converted temporary tariffs into permanent regulations, covering 1,463 tariff lines with rates from 10% to 50%. Textile rates were raised to 25%-35%, with garments up to 45%, affecting imports worth $52 billion. In April of the same year, Mexico added another 185 tariff lines with 5%-35% tariffs, hitting apparel, footwear, and textile accessories. The cumulative effect has significantly raised tariff costs for Chinese textiles entering Mexico, and a third round would further squeeze profit margins.
China is Mexico's largest source of textile and garment imports, with exports exceeding $1 billion in 2024, accounting for over 30% of Mexico's imports in this category. Industry data shows that after tariffs took effect, exports of some categories declined notably, especially high-volume basic products with thin margins. For domestic fabric and basic garment companies with profit margins of only 4%-8%, new tariffs mean either raising prices and losing customers or absorbing losses to keep orders—a dilemma.
Policy Drivers: External Pressure and Domestic Protection
Mexico's continuous raising of textile import barriers results from both external geopolitical pressure and domestic industrial demands. Externally, the U.S. has long worried about Asian textiles using Mexico as a transit point to enter the North American market duty-free under USMCA, so it pressures Mexico to tighten import management. As USMCA enters its annual review cycle, Mexico hopes to align its trade policies with U.S. demands to strengthen its bargaining position in renewal negotiations.
Internally, tariffs serve the Sheinbaum government's "Plan Mexico" national revitalization strategy. Mexico's domestic textile industry wants to resist low-priced foreign goods and protect local factory jobs, with industry associations repeatedly urging stricter import restrictions. The government aims to reduce imports through high tariffs and incentivize domestic textile investment. However, the policy is contradictory—many local garment factories rely heavily on Chinese fabrics and chemical fiber accessories, and the domestic supply chain is incomplete. Higher tariffs on imported fabrics will also raise production costs for local garment factories, weakening their competitiveness, which will temper overly aggressive policies.
Industry Transmission: Chain Reactions from Costs to Orders
The impact of tariffs goes beyond price levels, transmitting through the supply chain and triggering chain reactions. Intermediate products like yarn and greige fabrics are hit first—many Mexican garment factories purchase Chinese greige fabrics for processing, and after tariffs, downstream buyers may reduce purchases from China, shifting orders to Vietnam, India, or elsewhere. Additionally, Mexico has strengthened origin verification, cracking down on false declarations, raising inspection rates, and increasing risks of port detention and cargo seizure, further elevating logistics time and capital costs. Previous transshipment and gray clearance paths have been blocked, narrowing room for non-compliant operations.
However, the proposal is still under consultation, and final rates and product lists may change. This means companies still have a buffer window to prepare. But the window won't last long—the North American trade landscape is being reshaped, and trade protectionism is becoming a permanent reality for foreign trade companies.