New Delhi: Just when Prime Minister Narendra Modi’s phone conversation with US President Donald Trump triggered speculations that the massive American trade tariffs may be eased at some point, Mexican lawmakers on Thursday gave approval for enhanced tariffs on Asian imports, reports claimed. This means tariffs of 5–50% will be levied on goods exported from countries such as India. However, the tariff is not just for India but also for China.
Two years ago, Mexico had imposed this rate on some categories of products from countries with which it does not have a Free Trade Agreement (FTA), according to a report published in The Hindu.
According to the finance ministry in Mexico, the new tariffs will raise nearly 52 billion pesos ($2.8 billion) in extra revenue, reported the India Today. But manufacturers dependent on products made in China, India and South Korea, among Asian countries, have warned of rising costs that could fuel price rise.
How will the Mexico tariff impact Indian goods?
The Mexico tariffs that target any country lacking a Free Trade Agreement (FTA) with the country will have its ripple effects on India’s major export sectors. Some of the sectors that are likely to be impacted are automobiles, steel, and textiles.
According to analysts as quoted by the India Today, these new tariffs could lead to a 25–40% decline in some affected export categories. The automotive sector is likely to be the worst hit as Mexico is currently India’s third-largest export market for passenger cars after South Africa and Saudi Arabia.
Indian passenger vehicle exports to Mexico, totaling between $800 million and $1 billion annually, face a 50% tariff, representing a steep jump from the previous 20% duty, Reuters reported.
India’s iron and steel sectors are subject to Mexican tariffs ranging from 35% to 40%, India Today reported. Auto components face 25–50%, while textile, apparel, and footwear are hit by duties of 30–35%, the report states.
What’s the latest on US tariffs on India?
Coming to Trump tariffs, PM Modi spoke with the US President over the phone on Thursday. “We reviewed the progress in our bilateral relations and discussed regional and international developments,” Modi said in a post on X. The PM has described the call as “warm and engaging”.
According to reports, both the leaders have spoken at least three times since the latter hiked tariffs on imports from India. As much as 50% tariff were imposed by the US. Trump had termed half of the tariff as “penalty” for India’s oil trade with Russia despite Vladimir Putin’s war on Ukraine. But India has stressed its decades-old ties with Russia.
