China has formally demanded that Mexico immediately rectify what it calls "unilateral, protectionist practices," following Mexico's passage of a new tariff bill on Wednesday. In a statement published on its website Thursday, China's Commerce Ministry asserted that the revised duties, though scaled back from initial proposals, "harm Chinese interests."

Background of the Dispute:
The tensions escalated in September after the Mexican government announced plans to raise tariffs on imports from countries without a free trade agreement, aiming to bolster local industries and reduce reliance on Asian imports. An initial proposal targeted approximately $52 billion in imports. Mexico's Economy Minister, Marcelo Ebrard, stated the move would increase existing tariffs to the maximum levels permitted by the World Trade Organization (WTO).

China's Response and Investigation:
In response, China launched an investigation into Mexico's trade and investment barriers in September. The Commerce Ministry's latest statement warns that Beijing will continue this probe. It also reiterates a prior warning of potential retaliation, urging Mexico to "think twice" and "proceed with caution."

Strategic and Geopolitical Context:
The dispute arises amid complex economic shifts:

• Chinese investment and trade with Mexico have grown significantly in recent years.
• However, a surge in Chinese exports is seen as a threat to Mexico's ambitions in high-end manufacturing.
• Mexico faces growing pressure from the Trump administration to adopt a tougher stance on trade, particularly concerning Chinese goods.

The Chinese statement also linked the tariff hike to the upcoming review of the U.S.-Mexico-Canada Agreement (USMCA), suggesting the move may be strategically timed. It emphasized that no regional trade pact should "come at the expense of global trade" or harm China's legitimate interests. This follows comments by U.S. Trade Representative Jamieson Greer that the USMCA could be reshaped after renegotiation next year.

Call for Dialogue:
While pressing its demands, the Chinese ministry expressed a desire for continued cooperation, stating that Beijing "values its ties with Mexico" and hopes to resolve differences and deepen collaboration.

Mexico, which has trade agreements with over 50 countries, notably lacks one with China—one of its largest trading partners without such a pact, alongside South Korea and India. Mexican officials were not immediately available for comment.