Mexico "Tariffs on countries without FTAs"…South Korea also affected

Up to 50% on 1463 items including cars

The Mexican government plans to impose import tariffs on countries that have not signed free trade agreements (FTAs). South Korean products could also be affected.

On the 10th (local time), according to the speech by the economy minister and policy briefing materials posted online by the Mexican government, Mexico has selected 1463 items across 17 strategic sectors — including automobiles and auto parts, steel and aluminum, plastics, home appliances, and textiles — to impose tariffs of up to 50%. Currently these items are subject to tariff rates in the 0~35% range. This measure is expected to affect about 8.6% of Mexico's total imports. The amount is 52 billion dollars (about 72 trillion won).

The Mexican government said it would levy a 50% tariff on imported compact cars in particular to secure competitiveness in the automotive industry. Countries that have not signed FTAs with Mexico are subject to the tariffs. Countries that currently have FTAs with Mexico include the United States, Canada, the European Union (EU), Japan, Chile, Panama, Uruguay, etc.

South Korea could also be hit. South Korea's exports to Mexico last year were 13.6 billion dollars (about 19 trillion won). However, South Korea's exports of intermediate goods have been exempt from tariffs so far. It is unclear whether tariff exemptions will apply this time as well.

Some analysts say Mexico's move is aimed at China. The United States has pressured Mexico to prevent China from using Mexico as a "tariff circumvention route." Mexico's large trade deficit with China may also have influenced the decision. Last year, Mexico's trade deficit with China amounted to 113.1 billion dollars.

Reporter Im Da-yeon allopen@hankyung.com