In December 2025, both the Senate and the House of Representatives of the Mexican Congress successively passed a major tariff bill, planning to impose import tariffs on Asian countries such as China, India, South Korea, and Vietnam, which have not signed free trade agreements with them, starting from January 1, 2026, with the tax rate cap reaching 50%. Involving multiple core industries such as automobiles and auto parts, textiles, steel, and plastic products, nearly 1,400 products have been included in the adjustment scope. This policy will not only directly affect the bilateral trade between China and Mexico, but also may trigger further reshuffling of the global textile and other industrial chain patterns.

The textile industry is the first to be hit, and its supply chain is facing a reconstruction

As Mexico's second-largest trading partner, China's related industries will directly face the impact of tariffs, among which the textile industry will be more directly affected. China is an important source of imports for Mexican textiles. From January to November 2025, China's polyester filament output increased by 5.3% year-on-year. Exports play a key role in absorbing production capacity. However, Mexico's recent imposition of tariffs ranging from 10% to 35% on 1,014 tariff lines of textile products will directly weaken the price advantage of "Made in China". Take ordinary cotton T-shirts as an example. After the tax increase, if Chinese export enterprises maintain the original price, they will face losses; if they raise the price, they may lose market share. The increase in tariffs on textile raw materials such as yarn and greige cloth will also indirectly affect the procurement costs of local garment factories in Mexico.

Apart from the textile industry, industries such as auto parts and electronic products are also under pressure. Mexico's auto exports account for 30% of its total exports, and core components such as digital instrument panel touch screens and high-end sensors produced in China are important supports for the cost-performance advantage of Mexico's auto industry. After the tax increase, local Mexican automakers may shift to their North American supply chains, and Chinese auto parts exporters may face a 20% to 30% decline in orders in the short term. What is more serious is that the path for some Chinese enterprises to enter the North American market through "nearshore outsourcing" in Mexico may be blocked - if the USMCA further strengthens the "rules of origin" in its review, the channels for Chinese goods to be re-exported through Mexico will be significantly compressed.

While Mexico was imposing higher taxes on China, the major textile countries in Southeast Asia were showing the opposite policy trend, providing new space for China's textile raw material exports. On December 3, 2025, the Ministry of Industry and Trade of Vietnam issued an announcement, making a final ruling on the second interim review of polyester filament yarns originating from China, adjusting the anti-dumping duties to 3.57%-12.63%. Although this tax rate has slightly increased compared to the first review in 2023, it is still far lower than the 3.36%-17.45% of the original final ruling in 2021, creating a more relaxed environment for Chinese polyester filament to enter the Vietnamese market.

The policy adjustments in India are also worthy of attention. Previously, India's BIS certification requirements for polyester products such as PTA, ethylene glycol, polyester POY, and polyester FDY seriously hindered China's exports of related products - in 2024, China's exports of polyester POY and FDY to India were only 62,600 tons. It plunged by 86.6% compared with 469,000 tons in 2023. After India revokes this certification requirement by the end of 2025, domestic polyester civil filament exports to India are expected to gradually recover. Data from the China Chemical Fiber Industry Association shows that from January to October 2025, China's cumulative exports of polyester filament increased by approximately 10% year-on-year. The top ten export destinations, including India, all achieved positive growth. Exports have become an important way to absorb domestic production capacity.

Facing the challenges brought by Mexico's tax hikes, Chinese enterprises are also actively seeking coping strategies. Some textile enterprises plan to adjust their supply chain layout, such as setting up small processing factories in Mexico or turning to Southeast Asian markets with more lenient policies like Vietnam and India. Some enterprises have chosen to optimize their product structure, increase the research and development of high value-added and high-tech textile products, and reduce their reliance on low-end products that are sensitive to tariffs. The Ministry of Commerce of China launched a trade and investment barrier investigation into Mexico in accordance with the law at the end of September 2025. The investigation is currently ongoing and may strive for a fairer trade environment for enterprises through bilateral consultations in the future. Market participants need to closely monitor the OPEC+ production cut decision, the adjustment of US sanctions against Russia, and global economic data to judge the price trend in the next stage.

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