China’s Ministry of Commerce has launched two trade investigations mirroring US Section 301 probes, escalating a dispute that directly affects Mexico’s trade enforcement posture and its role as a transshipment concern for both Washington and Beijing. Mexico has responded by making permanent steel tariffs of 10% to 35% on imports from China, Vietnam and South Korea, while advancing anti-dumping proceedings against Chinese and Vietnamese steel producers, moves that Beijing estimates will affect more than US$30 billion in Chinese exports and generate losses of approximately US$9.4 billion. 

China’s Ministry of Commerce has announced the launch of two trade investigations in response to US practices restricting Chinese products from entering the US market, stopping short of immediate retaliation against measures announced by Washington earlier this month.

The two investigations, expected to conclude within six months but subject to extension, mirror two similar US probes launched under Section 301 against China. Beijing described the move as reciprocal. The investigations will examine US trade practices and measures that “disrupt global supply chains and industrial chains” and “obstruct trade in green products,” the ministry said in separate statements.

According to the ministry, the US measures restrict or prohibit Chinese products from entering the American market while also limiting US exports of high-technology products to China. Washington has also applied measures that curb exports of green products and slow the deployment of new energy projects, which could affect the interests of Chinese companies, the ministry added. China said it will take corresponding action to defend its rights and interests based on the findings of the investigations.

The announcements come as the two countries maintain a trade truce established after US President Donald Trump met with Chinese President Xi Jinping in October. Trump said this week he plans to visit Beijing in mid-May as part of a broader effort to reset relations in the Asia-Pacific region.

US Pressure and Mexico’s Role

The trade dispute extends beyond the bilateral US-China relationship. US officials have raised concerns for months over China’s expanding economic presence in Mexico, with allegations that Chinese goods are being rerouted through third countries to bypass trade restrictions. Washington has also pressured Mexico to exit the Trans-Pacific Partnership, a pact it joined in 2018 that has disproportionately benefited Asian economies with close ties to China.

Meanwhile, Mexico has moved to tighten trade enforcement. Minister of Economy Marcelo Ebrard announced the permanent extension of tariffs ranging from 10% to 35% on steel imports from countries without free trade agreements with Mexico, including China, Vietnam and South Korea. 

Originally imposed in April 2024 on 1,466 products and set to expire in April 2025, the tariffs will now remain in place indefinitely, covering 220 steel products. The government also plans to phase out temporary import permits for steel under the IMMEX program and strengthen oversight of special import regimes to prevent their use as transshipment channels for Asian goods entering the United States through Mexico.

China’s Ministry of Commerce said the tariff increases and non-tariff measures imposed by Mexico constitute barriers to commerce and investment, and that Beijing reserves the right to adopt countermeasures. The ministry estimated that Mexico’s tariff hikes affect more than US$30 billion in Chinese exports and could result in losses of approximately US$9.4 billion for China’s mechanical and electrical sectors. Of that figure, roughly US$9 billion would fall on China’s automotive and auto parts industries. Mexico was China’s top vehicle export destination in 2025, according to customs data and industry estimates cited by the ministry.

In a related development, Mexico’s Ministry of Economy said it is moving toward imposing sanctions on steel companies from China and Vietnam over alleged dumping of hot-rolled steel imports. The probe was initiated after a complaint filed in November 2024 by Ternium and covers import operations between September 2023 and August 2024. Proposed duties vary by exporter, ranging from US$0.20/kg to US$0.23/kg for Chinese producers.

China Pledges Balanced Trade and Greater Market Access

Against this backdrop of mounting trade tensions, Beijing has moved to address concerns over its record US$1.2 trillion trade surplus in 2025. Premier Li Qiang, speaking to global executives and policymakers at the China Development Forum in Beijing, outlined a series of policy commitments aimed at increasing imports and deepening economic openness. 

“China will import more high-quality foreign goods and work with all parties to promote optimized and balanced trade development and expand the global trade pie,” Li said, according to state media.

Although Li did not directly reference the record surplus, his remarks signal an effort to manage global scrutiny and stabilize trade relations following recent tariff disputes with the United States and the European Union. China’s central bank governor, Pan Gongsheng, addressed the imbalance issue from a broader perspective, arguing that assessments of trade gaps should account for services trade and financial accounts, not only goods. 

“While China has the largest goods surplus, it also records the world’s largest services deficit,” Pan said. He added that China does not intend to gain a competitive advantage through currency depreciation.

On FDI, China is working to reverse a decline in foreign direct investment, which fell 5.7% year-on-year to just over US$13.36 billion in January, following a 9.5% contraction in 2025. In December 2025, authorities expanded incentives for foreign investors, adding 200 sectors eligible for policy support, including advanced manufacturing, modern services, green industries and high-technology sectors, with benefits covering tax treatment and preferential land use.

Premier Li said foreign companies will receive equal treatment with domestic firms. “Foreign enterprises will be treated the same as domestic ones, allowing companies from all countries to develop with confidence and realize their ambitions in China,” he said. Commerce Minister Wang Wentao reinforced that position in meetings with multinational pharmaceutical companies and a US industry group, pledging stronger intellectual property protection and greater policy transparency for foreign businesses operating in China.