Mexico's Tariff Hike to Hit Brazilian Exports Starting January 2026

The Mexican Senate has approved a sweeping increase in import tariffs affecting Brazil among other countries, with the reforms set to take effect on January 1, 2026. The newly passed legislation imposes minimum tariff rates of 35%, reaching as high as 50% on about 1,463 product categories spanning key sectors such as automotive, textiles, steel, plastics, electronics, and footwear.

This legislative move, dubbed the "tarifaço mariachi," was passed with 76 votes in favor and 5 against, amid significant pressure from the United States to protect American interests and restrict the flow of Chinese goods through Mexico. While China remains the most impacted, Brazil joins South Korea, India, Indonesia, Russia, Thailand, Turkey, and others as countries facing these steep tariffs.

President Claudia Sheinbaum and proponents from the ruling Morena party framed the measure as a strategic effort to strengthen Mexico's domestic industry amid economic stagnation and weak job creation, part of the broader "Plan Mexico." The plan aims to deter economic distortions and foster high-value industries within Mexico by countering the triangular trade of Chinese products through Mexican routes.

The tariff increases come at a delicate time as Mexico prepares for a review of the USMCA trade agreement with the United States and Canada in 2026. Analysts note that these hikes aim both to appease U.S. demands and provide Mexico with additional revenue — predicted to be around $3.76 billion next year — while protecting local jobs and industries.

Brazil, whose exports to Mexico reached approximately $7.1 billion between January and November 2024, faces serious concerns. Important Brazilian export sectors such as automotive, textiles, and plastics are vulnerable under this new tariff regime. The Brazilian Confederation of Industry (CNI) has urged the acceleration of a free trade agreement negotiation with Mexico to safeguard bilateral trade, as over 70% of current trade remains without tariff protection.

China's Ministry of Commerce criticized the tariffs as harmful protectionism and unilateralism, warning of possible retaliatory actions. Various business sectors within Mexico have also expressed apprehension, cautioning about inflationary pressures and the time required to develop alternative supply chains.

As the tariffs take effect early next year, Brazil's export economy faces significant challenges from Mexico's assertive trade protection policies amidst shifting geopolitical and economic dynamics in the Americas.