Mexico's Textile Tariff: 35% Protection for 400,000 Jobs

The Mexican government recently announced a new tariff policy aimed at protecting 400,000 jobs in the domestic textile industry. The policy involves imposing a 35% import tariff on 138 tariff subcategories of textile and apparel products and establishing a prohibited import list for textiles. The new tariff decree will take effect on December 20, 2024, and will last until April 22, 2026.

This tariff policy primarily targets products imported from countries that have not signed free trade agreements with Mexico, with China included in the list of taxable countries. However, some countries such as the United States, Canada, the European Union, the United Kingdom, Australia, Chile, Peru, Singapore, Vietnam, and Japan will be exempt from this tariff.

Mexican Economy Minister Ebrard emphasized that imposing a 35% tariff on 138 newly added textile products is an important supplement to the textile tariff list implemented in April 2024. Previously, Mexico announced on April 22, 2024, that it would impose temporary import tariffs ranging from 5% to 50% on 544 items from non-free trade agreement countries, including steel, aluminum, textiles, clothing, and footwear. The Mexican government is actively expanding the list of prohibited imports for textiles to further protect the domestic textile industry.

Additionally, the Mexican government also announced that starting from January 1, 2025, it will impose a 16% value-added tax (VAT) on all foreign e-commerce platforms, including Amazon. This policy aims to increase government tax revenue and strengthen tax oversight of foreign e-commerce platforms. According to the announcement, all businesses selling goods and services through foreign e-commerce platforms in Mexico will be subject to taxation, regardless of whether these businesses are local companies. The government also canceled the previous VAT exemption for purchases under $50.