China and Mexico held talks in Beijing on Monday to address escalating trade tensions following Mexico's imposition of steep tariffs on Chinese imports. Mexico's Deputy Economy Minister Vidal Llerenas met with China's chief trade negotiator Li Chenggang to discuss bilateral economic relations. The tariffs, ranging up to 35%, target thousands of goods including automobiles, textiles, and steel, and were partly intended to align with U.S. President Donald Trump's trade policies.

Mexico's tariffs, effective December 2025, aim to boost domestic production and reduce trade imbalances. While China warned Mexico to reconsider during negotiations, no retaliatory measures have been announced. The move threatens China's position as Mexico's second-largest trading partner, behind the United States.

Separately, China's top automaker BYD faces delays in establishing a Mexican factory due to U.S. concerns over technology leakage. This comes as the U.S., Mexico, and Canada prepare to review their free trade agreement by July 2026. Analysts warn the pact may be revised to restrict Chinese-origin goods exported through Mexico.

The talks underscore Mexico's balancing act between U.S. demands and economic strategy. With the USMCA review looming, the outcome could reshape North American trade flows and China's access to the American market via Mexico.