Mexico to Finalize Tariffs of Up to 50% by 2027... Korea Also Affected

Targeting Non-FTA Countries
Extension Seen as Securing Time for Negotiations, Not a Tariff Moratorium

The Mexican Congress has extended the deadline for approving a plan to impose tariffs of up to 50% on countries without a free trade agreement (FTA) with Mexico until 2027.

Claudia Sheinbaum, President of Mexico. Photo by EPA Yonhap News

According to a congressional resolution available on Mexico’s electronic government gazette system on November 5 (local time), the Economic and Trade Committee of the Mexican Chamber of Deputies passed a motion at its 9th annual meeting on October 28 to extend the review and approval deadline for the government’s amendment to the General Import and Export Tax Law (LIGIE) until August 31, 2027, when the 66th legislative session ends.

In the resolution, the committee stated, "If the committee deems it appropriate to extend the decision on a referred agenda item, it may do so through the committee board within the prescribed review period, in accordance with the relevant regulations." The committee clarified that the review deadline for the government amendment to the General Import and Export Tax Law was extended based on this provision.

Previously, the Claudia Sheinbaum administration announced that it would designate 1,463 items across 17 strategic sectors-including automobiles and auto parts, steel and aluminum, plastics, home appliances, and textiles-for differentiated tariffs within the bounds of World Trade Organization (WTO) regulations. If this policy is implemented, current item-specific tariffs, which range from 0% to 35%, could be raised to as high as 50%.

The countries subject to these tariffs include China and any nation that does not have an FTA with Mexico. This also includes South Korea, which, as of 2023, is Mexico’s largest trading partner in Latin America.

The recent decision by the Mexican Chamber of Deputies committee does not postpone the tariff increases themselves but rather secures more time for legislative discussions on the matter. Regarding this, President Sheinbaum has stated, "We are open to dialogue with South Korea and China," indicating a willingness to negotiate with countries that would be affected by the tariff hikes.

From Mexico’s perspective, ahead of discussions on the United States-Mexico-Canada Agreement (USMCA), the possibility of raising tariffs on countries without FTAs could serve as a negotiating tool with the Donald Trump administration. In this context, the Sheinbaum administration may be seeking to use its tariff policy on non-FTA countries as leverage to adjust the terms of USMCA’s tariff-free benefits in Mexico’s favor, thereby maintaining a bloc economic order with its largest trading partner, the United States.

This content was produced with the assistance of AI translation services.