Supervisor

Stephen Chandler

Programme

MA in International Business

Keywords

Mexican Consumers, Tariff Increases, Cost of Living

Abstract

This study examines the impact of Mexico’s 2026 tariff increases on household welfare, consumer behaviour, and perceptions of rising living costs; the research explores the extent to which protectionist trade policies achieve their industrial objectives while also affecting consumers and overall economic welfare. The study draws on key theoretical perspectives including comparative advantage, industrial policy, trade diversion, pass-through theory, and behavioural economics.

The research adopts a quantitative exploratory approach, combining a review of existing literature with primary data collected through an online survey of 50 Mexican participants; the survey was designed to evaluate perceptions of price increases, financial pressure, and changes in consumption behaviour following the implementation of the 2026 tariff measures.

The findings indicate a strong perception of rising prices among respondents, with most participants associating these increases with recent tariff policies. Essential goods, particularly food and groceries, were identified as the most affected categories; the results also reveal important behavioural changes among consumers, including reduced spending, substitution toward cheaper alternatives, and increased local consumption. However, the findings suggest that this shift toward domestic products is driven more by financial necessity than by improved competitiveness or consumer preference.

In addition, the study highlights the uneven distribution of tariff-related pressures across households, with middle- and low-income consumers reporting higher levels of financial strain and reduced purchasing power, the findings further support existing literature suggesting that tariffs are largely passed on to consumers through higher retail prices. Overall, the study concludes that while tariffs may support certain strategic and industrial objectives, they also generate important short-term economic pressures for households; the research therefore emphasises the importance of adopting a more balanced policy approach that combines industrial development objectives with consumer protection and long-term economic sustainability.

Date of Award

2026

Full Publication Date

2026

Access Rights

open access

Document Type

Capstone Project

Resource Type

thesis

Digital Object Identifier (DOI)

https://doi.org/10.63227/652.299.169

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