Mexico is considering a two-track approach to tightening trade rules on China: imposing fresh restrictions on targeted product categories while raising existing import taxes on others, according to four people familiar with the deliberations. The discussions are active, not preliminary.
The talks with Washington form the backdrop. U.S. trade officials have pressed Mexico to mirror the Section 232 framework—the national-security tariff authority the United States used to impose duties on steel and aluminum—by applying comparable import duties on steel and aluminum from countries outside North America. The explicit goal is a common external barrier that preserves preferential access for producers in the United States, Mexico and Canada under the existing North American trade arrangement while blocking cheaper Chinese metal from entering the region through Mexico.
Section 232, named for a provision of the Trade Expansion Act of 1962, allows the U.S. executive branch to restrict imports that threaten national security. The Trump administration used it aggressively in its first term for steel and aluminum and has expanded its application in the current term. Washington's ask of Mexico is to build a parallel wall on the southern end of the North American supply chain, closing the gap through which Chinese producers have moved product.
Mexico's openness to the U.S. proposal is notable because the country has historically resisted Washington's most aggressive trade demands. The shift reflects Mexico's position: it cannot afford to lose preferential access to the U.S. market, its largest export destination by a wide margin, and bilateral trade talks are already under strain. Accepting some version of the steel-and-aluminum request is seen in Mexico City as a way to demonstrate good faith while keeping the broader commercial relationship intact.
China's economic footprint in Mexico has grown substantially as manufacturers sought to use the country as a backdoor into the U.S. market after Washington raised tariffs on Chinese goods. Chinese companies established or expanded assembly and manufacturing operations in Mexico, allowing goods to enter the United States under North American trade rules. That strategy, sometimes called tariff laundering, is precisely what U.S. officials want Mexico to shut down.
The pressure on Mexico is not limited to steel. The broader package under discussion includes selected consumer and industrial goods beyond metals, reflecting Washington's concern that the China-through-Mexico channel extends well beyond the steel sector. Mexican officials are weighing which product categories to target and at what duty levels, according to the people familiar with the matter. No final decisions have been made and the scope remains under negotiation.
Mexico's own competitive concerns complicate the picture. Domestic manufacturers in several sectors face direct competition from low-cost Chinese imports that enter Mexico for local consumption rather than transshipment to the United States. Higher tariffs on those goods would protect Mexican industry, giving the government a domestic political argument for the move that does not rely solely on satisfying Washington's demands.
The U.S.-Mexico trade relationship is the largest bilateral goods trade relationship in the Western Hemisphere. Mexico became the top U.S. trading partner in 2023, surpassing China, and has held that position since. Any disruption to that relationship carries costs for both sides, which is part of why talks have moved slowly. The grinding pace of negotiations is itself a signal that the gap between U.S. demands and what Mexico is prepared to commit to formally remains wide.
China has not publicly commented on the reported Mexican deliberations. Beijing has consistently opposed third-country tariff arrangements that it views as coordinated containment, and Chinese officials have lobbied trading partners in Latin America and Southeast Asia to resist U.S. pressure to restrict Chinese goods. Mexico's decision will be watched closely in capitals across the region where similar U.S. pressure has been applied.
The next concrete step is whether Mexico formalizes any of the measures under discussion into official trade policy. That would require action through Mexico's Economy Ministry and, depending on the mechanism chosen, possible coordination with the country's tariff schedule under its World Trade Organization commitments. WTO rules allow members to impose safeguard or anti-dumping duties under specific procedures, but a broad Section 232-style national-security tariff would require Mexico to invoke its own legal authority—a step the country has used sparingly.
