On December 19, 2024, Mexico announced a significant increase in import duties on textiles and apparel to protect its domestic industry. The new tariffs, effective December 20, will remain in place until April 23, 2026. The measures aim to address unfair competition caused by low-cost imports, primarily from countries without Free Trade Agreements (FTAs) with Mexico.
Higher Tariffs and Targeted Products
The new regulation expands the 35% import duty to 138 additional tariff lines for finished garment products and imposes a 15% duty on 17 tariff lines for unfinished textile goods. These measures complement earlier tariffs ranging from 5% to 50% introduced in April 2024. Products originating from FTA partners, such as those under the USMCA agreement, are exempt from these increases.
Economy Minister Marcelo Ebrard emphasized that these tariffs target “unbelievably low-priced” imports, mainly from countries like China, which dominate the market with cheap textiles. The increased tariffs aim to curtail practices like underreporting imports as intermediate goods to evade taxes.
“In summary, we’re increasing tariffs to protect our national industry, ensuring fair competition and closing loopholes that harm domestic producers,” Ebrard said during a press conference.
Changes to the IMMEX Program
The IMMEX program, which allows duty deferrals for manufacturers in Mexico, has also been updated. Certain textile products are now banned from being imported under the program, and stricter requirements have been introduced for goods eligible for IMMEX benefits. The changes are intended to prevent misuse, such as selling imported goods domestically instead of using them for manufacturing exports.
Impact on the Domestic Textile Industry
Mexico’s textile and apparel industry employs approximately 400,000 people and serves as a significant contributor to the economy. However, the sector has suffered from job losses and declining gross domestic product (GDP). Since 2019, Mexico has imported more textiles than it exports, leading to an annual GDP contraction of 4.8% in the textile sector.
Ebrard highlighted the urgency of these protective measures, noting that 75,000 additional jobs could be lost without intervention. The largest textile-producing regions, including Estado de México, Puebla, Hidalgo, Coahuila, and Guanajuato, have already seen substantial declines in employment.
Strategic Objectives and Future Outlook
The government’s protectionist measures align with its broader economic strategy to reduce reliance on imports and strengthen domestic industries. “The more Mexican content there is, the more jobs we create,” Ebrard stated, reinforcing the goal to boost national production and competitiveness.
The measures also aim to curb technical contraband and ensure that imported products comply with declared purposes. While the tariffs primarily target textiles, further expansions to other imported goods, such as Chinese electric vehicles, are being considered.
These policies reflect Mexico’s commitment to preserving jobs, stabilizing the textile industry, and promoting local production amidst growing competition from international markets.
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