Imports hit by new tariffs are down 23%, with China posting the steepest losses
New tariffs approved by Mexico's Congress have significantly reduced imports from countries without free trade agreements, with China bearing the brunt of the impact as its exports to Mexico fell by more than a quarter in the first five months of 2026.
The government reported Monday that imports across 1,463 tariff classifications affected by the new duties declined 23.2% between January and May, dropping from $15.383 billion in the same period of 2025 to $11.808 billion this year. The tariff reform, which Congress approved on December 10, 2025 by a vote of 281 to 24, took effect on January 1, 2026.
China, which supplied the majority of goods subject to the new tariffs, saw its affected exports to Mexico plummet 28.4%, from $10.099 billion to $7.228 billion. The decline was particularly severe in January, when Chinese car imports alone fell 45.3%, dropping from $344 million to $188 million according to China's General Administration of Customs. Chinese vehicles had previously faced a 20% import duty before the new 50% tariff took effect, representing a substantial increase targeting electric vehicle manufacturers like BYD, MG, and Changan.
The automotive sector overall experienced sharp declines, with light vehicle imports down $1.18 billion in monetary terms, a decrease of 29.7% compared to the same period last year. Auto parts imports fell 39.5%, while the footwear sector declined 37.9%. Steel products saw a 30% drop in imports.
Other Asian markets also affected
Beyond China, other major Asian suppliers also registered significant losses. Taiwan's tariffed goods fell 32%, South Korea dropped 22%, India declined 12.3%, and Thailand decreased 6.3%.
However, these declines tell only part of the story. Overall imports from Asia actually surged 42.5%, rising from $108.97 billion during the first five months of 2025 to $155.23 billion this year. Taiwan led this unexpected growth, with its total imports to Mexico increasing 233.76% annually, from $10.77 billion to $35.94 billion.
This dramatic surge stems from heightened demand for artificial intelligence services, driving Mexico to import more data processing units, chips and semiconductors from Taiwan. Between January and March 2026, Taiwanese companies including Wiwynn, Ingrasys, PCE Technology, Pegatron, Foxconn and Quanta Computer imported over $19.2 billion worth of semiconductor and data center hardware to Mexico, tripling from $5 billion in the same period of 2025.
Taiwan-based firms are using Mexico as a platform to assemble semiconductors and AI hardware imported from Taiwan before exporting them to the United States, a nearshoring pattern driven by demand from US cloud providers. This strategic positioning takes advantage of Mexico's trade relationships, as the country maintains 14 free trade agreements covering 52 countries that represent approximately 60% of global GDP, exempting those nations from the new tariffs.
Trade dynamics shift
The growth rate of imports from Asia exceeded imports from the American continent by 8.5 times during the January-May period. Purchases from Asian countries now represent 49.85% of total imports, while imports from the Americas stood at 39.61%, with nearly all of that total coming from the United States and Canada at 92.2%, or $112.6 billion.
Despite the surge in Asian imports, the United States remains Mexico's top trade partner with a 34.32% share of total imports in the period from January to May, followed by China at 17.42% and Taiwan at 11.54%. Mexico became the United States' largest trading partner in 2023 and maintained that position through 2024, with total bilateral trade reaching approximately $806 billion under the USMCA.
The tariff legislation went through significant modifications before passage. President Claudia Sheinbaum originally submitted the proposal to Congress in September 2025, but the bill was substantially softened by a lower house committee, though the 50% maximum tariff on imported vehicles remained intact. Some automotive tariffs were reduced from the initially proposed 50% ceiling to 25-35% ranges, reflecting industry lobbying efforts.
Chinese vehicles had captured 25.4% of total Mexican auto sales in 2025, up 4.6 percentage points from 2023, with Chinese manufacturers like BYD, Great Wall Motor, and Chery claiming a combined 14.5% market share. This growing presence made the automotive sector particularly vulnerable to the tariff increases.
China's total imports to Mexico were $133.24 billion in 2025, with electrical and electronic equipment accounting for $44.97 billion and machinery for $26.64 billion, making these the largest categories affected by the new trade policy.
