MEXICO CITY, Dec 10 (Reuters) - Mexico's Senate approved on Wednesday tariff hikes of up to 50% next year on imports from China and several other Asian countries, aiming to bolster local industry despite opposition from business groups and affected governments.
The proposal, passed earlier by the lower house, will raise or impose new duties of up to 50% from 2026 on certain goods such as autos, auto parts, textiles, clothing, plastics and steel from countries without trade deals with Mexico, including
China, India, South Korea, Thailand and Indonesia. The majority of products will see tariffs of up to 35%.
With 76 votes in favor, 5 against, and 35 abstentions, the senate approved the bill, despite opposition from China and local business groups.
The approved bill is softer than the one that stalled in the lower house this autumn, with about 1,400 tariff lines — mostly textiles, apparel, steel, auto parts, plastics and footwear — and reduced duties on roughly two-thirds of them compared with the original proposal.
Analysts and the private sector argue the move is aimed at appeasing the U.S. ahead of the next review of the United States-Mexico-Canada trade agreement (USMCA), and say it is also intended to generate $3.76 billion in additional revenue next year as Mexico seeks to reduce its fiscal deficit.
"On the one hand, it protects certain local productive sectors that are at a disadvantage with respect to Chinese products. It also protects jobs," said Mario Vazquez, a senator for the opposition PAN party.
"But, on the other hand, (...) the tariff is an additional tax that citizens pay when they buy a product. And these are resources that go to the state. We would need to know what they are going to be used for. Hopefully, production chains in the country will be strengthened,” Vazquez added.
Emmanuel Reyes, a senator from the ruling Morena party, defended the measure.
"These adjustments will boost Mexican products in global supply chains and protect jobs in key sectors," said Reyes, who is also chairman of the Senate Economy Committee.
"This is not merely a revenue-raising tool, but rather a means of guiding economic and trade policy in the interest of general welfare," he added.
Looming over Mexico's sweeping tariff proposal is next year's USMCA review. Earlier this year, Mexico stepped up tariffs on Chinese goods in what analysts said was an effort to appease Washington. But U.S. officials continue to raise concerns.
(Reporting by Diego Ore, Writing by Iñigo Alexander; Editing by Christian Plumb and Jacqueline Wong)
