📦 Mexico's New Tariff Regime
On January 1, 2025, Mexico implemented new tariffs on e-commerce imports ranging from 17% to 19%. These rules target products imported through platforms like Amazon, Temu, and Shein. Additionally, foreign e-commerce firms must pay a 16% VAT on goods sold in Mexico. The Federal Tax Agency (SAT) stated this aims to curb abusive practices by foreign companies and strengthen local industries. Goods from countries without trade agreements, like China, face a flat 19% tariff.
🛒 Chinese Goods Face the Highest Rates
Chinese e-commerce giants Temu, Shein, and AliExpress are particularly affected, as Mexico has no free trade agreement with China. For instance, a $700 MXN LED lamp shipped from China incurs a 19% tariff, adding $133 MXN to its cost, before VAT. Imports from the U.S. and Canada, under the USMCA agreement, enjoy lower tariffs or exemptions for goods valued under $50 USD. Mexican officials argue these measures will protect jobs and reduce reliance on cheap Asian imports.
🧵 Protecting Domestic Industries
Mexico's government also introduced 35% tariffs on clothes and textiles from non-FTA countries in December. This protects Mexico's struggling textile sector from cheap Chinese imports. Raids on stores selling counterfeit goods have further emphasized the government's focus on fair competition. According to SAT, these policies level the playing field between local businesses and foreign e-commerce giants, increasing demand for locally made products.
💼 Economic and Political Goals
Mexico's tariffs aim to boost domestic production, increase tax revenues, and align with U.S. trade policies under President Trump. With one of the lowest tax collection rates in the OECD, Mexico hopes to gain additional revenue while sending a political message to its largest trading partner. SAT plans to tighten customs surveillance, which may delay shipments but ensures compliance. This policy could mark a significant shift in Mexico’s trade and tax strategies.
Will these tariffs boost Mexican industries or hurt consumers?
