Mexican Secretary of Economy Marcelo Ebrard recently asserted that the Latin American country must pursue more incisive legislation to achieve an import-substitution model, especially for goods from China.

“The most successful countries and companies are those that have an aggressive industrial policy. A country without an aggressive industrial policy will not fare well,” the Mexican official asserted on November 18. 

Ebrard explained that if Mexico does not adopt the same type of policies as the United States and China, competition “will wipe out entire industries, which you then cannot replace or rebuild.”

In addition to the statements made by the Secretary of Economy, in January, the Mexican government presented Plan Mexico, a vision for national development with 13 goals to reduce poverty and inequality, to boost domestic production, and reduce reliance on imports from countries with significant influence in international trade, among other things. 

Furthermore, as part of its new tax collection strategy, Mexican authorities have raised the possibility of imposing tariffs of up to 50% on imports of Chinese light vehicles.

The tariffs that Mexico will impose on Asian countries aim to reduce the trade deficit, Ebrard stated, noting that in four years it had grown by more than 80%, which is why measures were needed to reverse the gap. From 2020 to 2024, it grew by 83%, and if Mexico does not take action, there will be no way to finance that.

Ebrard added that another reason is that Mexican importers buy products at costs below the reference price. That means there are many strategies to gain market share, such as stockpiling of inventory, which causes major damage to Mexico’s production capacity.

China’s export boom over the last two decades has generated trade deficits in most of its trade balances, which adds to the neoliberal trend of dismantling the instruments the State has to execute autonomous planning and policies. There is a real need to restructure the balances of all countries to protect their sovereignty, and to do so, they need to manage the evolution of their own industries, avoiding any flow that, in a disproportionate or uncontrolled way, could affect economies.

In the case of Mexico, past governments—which promoted the neoliberal model—had very little capacity and very little willingness to implement policies of a more sovereignist nature. As of today, the structure of the Mexico Plan implies that the Latin American country can move towards an import-substitution model. This would favor strengthening the domestic market, which has been neglected in recent times, and would also give Mexico the sovereignty to make decisions and reduce dependence on foreign production chains.

According to official data, in May 2025 alone, Mexico’s international sales to China totaled $686 million, while purchases from the East Asian country reached $10.64 billion. This resulted in a negative trade balance of $9.954 billion.

For this reason, and with pressure from the US, Mexico is taking a more aggressive stance towards China.

The US wants its southern neighbor not to be a country that triangulates products from China and to take advantage of the trade benefits Mexico has with Washington through the United States–Mexico–Canada Agreement (USMCA). This is US pressure on Mexico amid its trade war with China, where Mexico plays an important role as a pivot economy in Latin America.

Some Mexican industries, such as textiles, have been severely impacted by Chinese products—an industry that should be strengthened through trade strategies.

At the same time, Mexico’s automotive industry would be harmed by imposing tariffs on products from the Asian giant. If trade policies are to be implemented aggressively, they must go hand in hand with an industrial development process. China has been making significant progress in the automotive sector, particularly in the electric vehicle industry, where it has a considerable advantage over the North American and European industries.

In the case of Mexico, it seems that tariffs are being used to defend Washington’s sphere of influence in the country. Rather, Mexico should focus on economic diplomacy, as it currently lacks the capacity to fully replace its imports from China. The Mexican government should begin gradually considering this process, as Mexico is emerging from a fragmented economy. What the Mexico Plan is doing is restructuring the economy, and Mexico is now in the process of consolidating that possibility.

At this time, the Latin American country does not have that capacity for import substitution, and it is a process that requires years. What can be done is to orient industrial policy in that direction, with an industrialization plan that, in the short- to medium-term and, above all, in the long term, will bear fruit. For that, there needs to be continuity.

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Ahmed Adel is a Cairo-based geopolitics and political economy researcher. He is a regular contributor to Global Research.

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