Mexico's third round of tariff hikes is still under discussion, but anxiety is already spreading across the textile export chain. According to sources, the government is evaluating new restrictions on imports from countries without free trade agreements, including China, South Korea, India, and Vietnam, with textiles, fabrics, and garments again in focus. The previous two rounds have already caused notable declines in some categories, and a third round would hit low-margin, high-volume orders hardest.
Escalating Tariffs: Textiles in the Crosshairs
Mexico's protectionism is not a spur-of-the-moment decision. In January 2026, temporary tariffs became permanent, covering 1,463 tariff lines at rates of 10%-50%. Textile rates rose to 25%-35%, and garments up to 45%, affecting imports worth $52 billion. In April of the same year, an additional 185 tariff lines received 5%-35% duties, again targeting apparel and accessories. After two rounds, Chinese textile costs in Mexico have risen significantly, and a third round would add further pressure.
China is the largest source of textile and garment imports for Mexico, with exports reaching billions of dollars in 2024 and accounting for over 30% of Mexico's imports in this category. Industry data show that after the tariffs, exports of some products have already declined, especially basic, high-volume items with thin margins. For fabric and garment exporters with typical profit rates of 4%-8%, new tariffs could erase profits, forcing a choice between raising prices and losing customers or absorbing the costs.
External and Internal Drivers: Policy Unlikely to Ease Soon
Mexico's escalating barriers result from external pressure and domestic protectionism. The US has long worried about Asian textiles transshipping through Mexico to enter North America duty-free under USMCA, and has pressed Mexico to tighten controls. With USMCA under annual review, Mexico aims to align trade policies with US demands to gain leverage in negotiations.
Domestically, tariffs serve the 'Plan Mexico' industrial strategy, aimed at resisting low-cost imports and protecting local jobs. However, there is an inherent contradiction: Mexican garment factories heavily rely on Chinese fabrics and chemical fiber accessories, lacking a complete supply chain. Higher import costs will also raise production costs for local factories, weakening their competitiveness—a factor that may temper overzealous policy.
Stricter Customs Checks: Transshipment Paths Narrow
Beyond tariffs, Mexico has strengthened origin verification, cracking down on false declarations, raising inspection rates, and increasing risks of port delays and confiscations, which adds logistics time and financial costs. The space for transshipment and gray clearance has shrunk, making compliance a new variable exporters must address.
Notably, the proposal is still under consultation, and final rates and product lists may change, leaving a buffer period for companies. However, trade protection is becoming the norm, and the North American trade landscape is shifting. Textile exporters cannot wait passively; they must plan ahead.