China has formally demanded that Mexico immediately cease what it labels "unilateral, protectionist practices," following Mexico's passage of a revised but still contentious tariff bill on Wednesday.

In a statement on its website Thursday, China's Ministry of Commerce asserted that although the new duties are scaled back from an initial proposal, they "harm Chinese interests." The ministry confirmed that an ongoing investigation into Mexico's trade and investment barriers, launched in September, will continue.

Background and Scale:
The dispute began when Mexico announced plans to raise tariffs on imports from countries without a free trade agreement, aiming to bolster local industries and substitute Asian imports. The initial proposal targeted approximately $52 billion in imports, according to Mexico's Economy Ministry. Economy Minister Marcelo Ebrard stated the move would raise existing tariffs to the maximum levels permitted by the World Trade Organization (WTO).

Geopolitical Tensions and Warnings:
The friction occurs within a complex triangular trade relationship:

• Chinese investment and trade with Mexico have surged in recent years.
• However, a flood of Chinese exports is seen as an obstacle to Mexico's ambitions in high-end manufacturing.
• Concurrently, Mexico faces growing pressure from the Trump administration to adopt a tougher stance on trade with China.

Beijing had previously warned Mexico that it would retaliate if the tariffs were implemented. The latest statement cautions Mexico to "think twice" and "proceed with caution."

Link to USMCA and Call for Dialogue:
The Chinese statement suggested the tariff hikes may be strategically timed for the upcoming review of the U.S.-Mexico-Canada Agreement (USMCA), following comments from U.S. Trade Representative Jamieson Greer that the pact could be reshaped next year. China emphasized that no regional trade agreement should "come at the expense of global trade" or harm its legitimate interests.

Despite the strong demands, the ministry expressed a desire for continued cooperation, stating Beijing "values its ties with Mexico" and hopes to resolve differences.

Context:
Mexico has trade agreements with over 50 countries but 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.