A new front has opened in the global trade war. On September 25, China’s Ministry of Commerce initiated a sweeping investigation into Mexico’s decision to impose tariffs and other trade restrictions on Chinese exports. The probe underscores Beijing’s growing concern over third countries aligning with Washington’s protectionist stance and signals a strategic shift in how China defends its global trade position.
The investigation will scrutinize Mexico’s recent proposal to impose 50% tariffs on Chinese cars, as well as duties on roughly 1,400 products, ranging from steel and textiles to various manufactured goods. These measures, which target imports from countries lacking free trade agreements with Mexico, appear to disproportionately affect China.
Beijing views this move not merely as a bilateral disagreement but as a broader attempt by the U.S. to enlist its trade partners in isolating China economically. The Chinese commerce ministry stated that such actions “seriously damage the trade and investment interests of Chinese companies.” The legal basis for the investigation rests on Chinese trade law, which allows for retaliation to protect China’s foreign trade order.
Mexico: Strategic Pawn or Independent Actor?
While Mexico’s government, led by President Claudia Sheinbaum, insists the tariffs are meant to protect local industries, the geopolitical context cannot be ignored. The timing aligns closely with the 2026 scheduled review of the US-Mexico-Canada Agreement (USMCA). With over 80% of Mexican exports going to the U.S., Mexico faces intense political and economic pressure from Washington to reduce Chinese influence in its domestic economy.
The U.S. has accused China of using Mexico as a “back door” to bypass high American tariffs—allegations that fuel protectionist responses not just in Washington but now seemingly in Mexico City as well.
Despite public reassurances from Sheinbaum that “we have a very good relationship with China,” the probe indicates Beijing’s dissatisfaction. The Chinese response includes an anti-dumping investigation into Mexican pecan exports, a symbolic yet strategic countermeasure, aimed at reminding Mexico that retaliation—however indirect—is on the table.
Trade Imbalances and Leverage
From a purely economic standpoint, China holds limited direct leverage over Mexico. In 2024, Mexico exported just $5.7 billion worth of goods to China, while importing $115 billion—a stark trade imbalance that highlights Mexico’s dependency on Chinese goods.
That said, the relationship is not without vulnerabilities on both sides. Mexican sectors such as textiles and footwear have long voiced concerns over unfair competition from low-cost Chinese imports. This provides Mexico with some domestic political cover for introducing protective tariffs.
Yet China has a track record of using non-tariff tools to exert pressure. From controlling rare earths exports to Europe to targeting politically sensitive sectors like pork exports, Beijing has demonstrated its ability to escalate disputes via asymmetrical strategies.
A Signal to Third Countries
Perhaps the most significant aspect of this probe is its messaging function. By reacting forcefully to Mexico’s tariffs, China is signaling to other nations that there are consequences for aligning with U.S.-driven trade policies. This is especially important as more countries face pressure to choose sides in the fragmenting global trade landscape.
The probe is scheduled to conclude within 12 months, with a possible 6-month extension. While the direct economic impact may be limited, the strategic implications are considerable.
The coming months will reveal whether Mexico adjusts its stance or proceeds with full implementation of the proposed tariffs. Either way, China’s investigation highlights the growing complexity and politicization of global trade—especially in the lead-up to the U.S. presidential election and the USMCA review.
In the long term, the success or failure of China’s countermeasures could influence how other emerging economies structure their trade policies under pressure from larger powers.