Mexican President López Lopez recently signed a decree, which will increase the price starting from April 23, involving steel, aluminum, textiles and clothing, footwear, wood, plastics and their manufactured products, chemicals, paper and cardboard, ceramics, glass products, electrical Most-favored-nation tariffs on various imported products such as materials, transportation equipment, and musical instruments range from 5% to 50%. The Mexican government's decree updated new import tariffs, imposing new tariffs ranging from 15% to 35% in some cases on 21 countries. According to the decree, the measure is valid for all countries for a period of two years from April 23 to April 23, 2026.
Rafael Barrios, senior economist for Latin America at Fast Moving Consumer Markets, initially believed the decision made imports of U.S. products more advantageous than those from other countries, especially from China.
"Products may become more attractive due to the United States-Mexico-Canada Agreement (USMCA), which requires greater regional integration and due to lower logistical costs than importing from China," Barris-Oscars said .
The Economist also noted that the United States has available spare capacity, particularly in paperboard, to meet Mexican market demand.
"Nevertheless, the U.S.'s lost relevance is due to the cost of Chinese products, which are competitive enough to replace even with higher shipping costs (due to the greater distance between China and Mexico versus Mexico and the U.S.) American product," Barrios Kas explained.
Barrios Kas said he believed the tariffs imposed by the Mexican government would "level the playing field" and make U.S. products competitive for Mexicans again. Fastmarkets understands that some importers have indicated that they will take action to mitigate potential losses from these measures, while others are still assessing possible actions to mitigate the impact of the decision.
Mexico's China market share increased from 3.9% in 2020 to 17.2% in 2023. On the same basis of comparison, the market share of US products in the same segment fell from 62.2% in 2020 to 37% in January 2024.
However, Baliscas emphasized that the economic correlation between Mexico and the United States in packaging reaches 85%. He recalled that 80% of Mexico's exports are destined for the United States.
"Every 5% change in U.S. GDP results in a 4% change in Mexico's GDP," Bariscas said. Looking ahead, The Economist estimates that North American exporters are likely to increase prices in anticipation of increased demand.