US Imposes Tariffs on Mexico Amid Ongoing Trade Dispute with India

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Mexico Implements Tariffs on Indian Imports

Kolkata, India – Pankaj Chadha, owner of a steel manufacturing unit in Mumbai, has seen his business significantly impacted by recent tariff hikes imposed by Mexico. The 65-year-old exports products primarily to the US and Mexico, where they are used in various industries.

Prior to the tariffs, Chadha’s company had sales of $5m to the US and $8m to Mexico. However, those figures have since been halved due to the increased tariffs. “I have lost 50 percent of my business in Mexico and the US since the tariffs came into effect,” Chadha stated.

In August, US President Donald Trump imposed a 25% tariff on India as punishment for its continued purchase of Russian oil. Following this move, Mexico implemented steep import tariffs ranging from 5% to 50% on over 1,400 products from non-free trade nations, including India, Brazil, China, South Korea, Russia, Indonesia, and Thailand.

Mexico’s government claims the tariffs are aimed at boosting domestic production, addressing trade imbalances, and safeguarding local employment. However, Indian businesses attribute the move to Mexico seeking to protect itself from US retaliation over trans-shipment and supply-chain diversion issues.

The steep hike has caused concern among Indian businesses, particularly those that have invested in building supply chains with Mexico. Chadha described the Mexican tariffs as more disheartening than those imposed by the US, which will be lowered to 18% at some point. “The US tariffs were also imposed on our competitors,” he noted.

To mitigate the impact of the tariffs, India’s government has allowed manufacturing units in special economic zones (SEZs) to sell a limited portion of their output to domestic buyers at concessional duty rates. This move aims to address the decline in demand for exports-focused manufacturing units affected by US tariffs.

According to recent data, India exported goods worth $5.6bn to Mexico in 2024, led by vehicles and components, while importing goods worth $4.07bn, with oil and mineral fuels being the lead imports. Indian steel exports are facing a 50% tariff hike, followed by auto and auto component tariffs of 35%.

Source: Al Jazeera