The Real Deal with Mexico’s December 2024 Import Tariff Increase

On December 19, 2024, Mexican President Claudia Sheinbaum Pardo, issued a Decree which impacted import tariffs immediately. This Decree was issued by President Pardo – who assumed office on October 1, 2024 -and contained two significant regulatory modifications:

1. New tariffs for specifically scoped commodities – namely finished and semi-finished apparel products. These amendments are in effect from December 19, 2024 until April 23, 2026 with the potential of extension at a later date. These new tariffs are in addition to existing import duties and taxes and do not apply to any country that has a free trade agreement with Mexico. (MX has around 14 Free Trade Agreements (FTA) exist that cover ~50 countries – full list. These new tariffs do not apply to goods that qualify for preferential treatment under a Free Trade Agreement AND contain a valid FTA Certificate of Origin from a country with which Mexico has an FTA.)
2. The “IMMEX program” (the Fomento de la Industria Manufacturera, Maquiladora y de Servicios de Exportación) was amended to exclude certain commodities. This means the commodities can still be imported, just not under the IMMEX program which provides for the duty/tax free importation of qualifying goods into Mexico.

What did NOT change?

1. The USD $800 de minimis threshold via the United States Section 321 import program. There are no regulatory or legislative changes to any import or trade programs outside Mexico including duty free importations of low value goods under the USD $800 de minimis threshold via the United States Section 321 import program provisions.
2. ALL apparel imports into Mexico are still allowed – they now just carry increased tariffs and are no longer eligilbe for the IMMEX program. No products have been banned from import into Mexico.

1. Implementation of Tariffs

• · There were two different tariffs issued: 15% and 35%, and these were applied at the 8 digit HS Code level; the statistical suffix level, or “tariff fractions” using Mexican nomenclature.
• · The Decree indicates that these tariffs were necessary to safeguard market conditions and promote development of the nationally critical textile and clothing industries which are facing disadvantageous situations and decreased competitiveness due international trade and technical smuggling.
• · The scope is fairly narrow and impacts 17 specific products with the 15% tariff and 138 specific products with the 35% tariff.
  • For contrast, the United States Section 301 tariffs on certain goods of Chinese origin imported into the United States contained well over 10,000 specific products.

15% Tariff (On 17 Products)

17 specific tariff fractions, under Chapters 52, 55, 58, and 60 were impacted. These are semi-finished products or manufacturing inputs:

Chapter 52 Cotton:

Cotton weave, denim fabrics, other cotton tissue fabrics,

Chapter 55 Man-made staple fibers:

Raw, bleached, polyester, and mixed staple fibers

Chapter 58 Special woven fabrics:

Tuiles, lace, elastomeric yarn or rubber thread woven fabrics, and other special woven fabrics

Chapter 60 Knitted/crocheted fabrics:

Knitted/crocheted fabrics containing more than 5% by weight elastomeric yarn, wrap knit fabrics, other dyed cotton knitted or crocheted fabrics, other dyed knitted or crocheted synthetic fibers.

35% Tariff (On 138 Products)

138 specific tariff fractions, under Chapters 61, 62, 63, and one product from 94 were impacted. These are finished products of the clothing and apparel industries.

Chapter 61 – Knitted or Crocheted Articles of Apparel and Clothing

Certain knitted or crocheted male & female* coats/overcoats, jackets/blazers/overalls, dresses/skirts, pants, shirts/sweaters/blouses, underwear/nightwear, bathrobes, babies’ garments, ski-/swimwear, pantyhose/stockings, gloves/mittens, and other accessories made of cotton, synthetic, artificial or man-made fibers.

Chapter 62 – Articles of Apparel and Clothing, NOT Knitted or Crocheted

Same commodities as above, but NOT knitted or crocheted. Also includes bras and similar articles, ties/bowties, and accessories made of cotton, synthetic, artificial or man-made fibers.

Chapter 63 – Other Textile Articles and Work Clothing

Certain blankets, bed/table/toilet/kitchen linens, curtains/drapes/blinds, bedspreads, sacks/bags used for packing goods, cleaning/dish cloths made of cotton, synthetic, artificial or man-made fibers.

Chapter 94 – Bedding, Mattresses, Cushions and similar furniture not elsewhere specified

Certain comforters, quilts, bedspreads, and duvets.

*Note that global harmonized tariff schedules (HTS) are gendered with specific designations and classifications for men’s or boys’ and women’s or girls’ commodities.

Male= men’s or boys’                Female = women’s or girls’

Tariff Application Note

Tariffs are applied in addition to any existing duty, tax, and other ancillary import fees. For example, if a commodity already has a 10% duty and 16% VAT assessed at import, the tariff (15% or 35%) is applied on top of these existing import fees; it does not negate any existing duty or tax.

The above tariffs only apply to products originating from countries that do not have a Free Trade Agreement with Mexico. The tariffs do not apply to goods imported under a qualifying Certificate of Origin using preferential tariff treatment from a country with which Mexico has a current Free Trade Agreement.

2. Eligibility of Certain Commodities for IMMEX Program

There were two amendments related to the IMMEX Program included in the Decree; termination dates were not provided for either amendment.

IMMEX Decree – Annex I

The Decree added 320 tariff fractions (unique commodities) to Annex I of the IMMEX Decree which is a list of commodities prohibited from being imported under the IMMEX Program. Impacted commodities are finished textiles, clothing, and apparel products, and include those listed above in the 35% tariff section. A complete itemization can be found here. Of note: Companies can still import these goods into Mexico, but must do so outside of any preferential treatment of the IMMEX Program, and duty, tax, and fees must be paid prior to import at the regular rates

The goods mentioned in Annex I of the IMMEX Decree may not be imported under the IMMEX Program as imports free of duty, tax, and fees. However, there is not a comprehensive prohibition of importing these goods as regular permanent imports under a Pedimento. A “Pedimento de Importación” (“Import Declaration”) is the standard import entry documentation for formal permanent imports in Mexico.

IMMEX Decree – Annex II, Section C

302 tariff fractions were eliminated from Section C, Annex II of the IMMEX Program and instead moved to Annex I. Impacted commodities are likewise listed above in the 35% tariff section with a complete itemization shown here.

Certain commodities, primarily from the apparel/textile and sugar industries are critically important to the Mexican economy. For protection purposes, the Mexican government will restrict or prohibit these sensitive commodities from being imported via the IMMEX program and utilize Section C of Annex II to administer restrictions and prohibitions of sensitive commodities

Section C in Annex II of the IMMEX Decree establishes that in order for certain sensitive goods to be temporarily imported under the IMMEX program, they must meet specific requirements or be granted special authorization. Because the products listed Annex I are prohibited from the IMMEX program, they can not be granted special authorization for any exceptions.

IMMEX Program: An Overview

The IMMEX Program (Programa de Fomento de la Industria Manufacturera, Maquiladora y de Servicios de Exportación) is a Mexican government initiative started in 2006 and stems originally from the 1965 Maquiladora program. IMMEX was designed to promote foreign investment, support domestic manufacturing, and export industries. Managed by Mexico’s Ministry of Economy, the program allows companies to temporarily import goods and services free of certain taxes and duties, provided the final products are exported or otherwise accounted for with approved ultimate dispositions.

There are barriers to entry which does require prior and ongoing approval, but the IMMEX program offers significant opportunities for businesses to leverage multinational supply chain strategies, take advantage of special trade programs to reduce production costs, import fees, and increase profitability.

However, strict compliance with IMMEX regulations and requirements is essential to avoid penalties or program suspension. Key Considerations for Compliance requirements include:

Ensuring validity and eligibility of qualifying goods being introduced to the IMMEX for the specific approved program module, Inventory Control Systems, Audits and Inspections, and Annual Reporting.

Overview of IMMEX Program Categories

IMMEX offers five program categories from which the applicant must choose prior to admission depending upon their unique business activities.

1. IMMEX Industrial Program – the most commonly used IMMEX program category.
   For companies that use imported goods to further manufacture or transform into finished goods which are then used domestically or exported as required.
2. IMMEX Holding Companies Program
   Applies to a group of registered entities under a single umbrella IMMEX registration, provided they have shared activities and ownership.
3. IMMEX Services Program
   For companies that provide export-related services, such as IT, call centers, or engineering and export services. There are greater limitations on IMMEX Services Program companies for importing listed sensitive goods.
4. IMMEX Shelter Program
   Allows foreign companies to operate in Mexico without formally establishing a Mexican legal entity. This third party shelter company assumes risk and manages compliance.
5. IMMEX Outsourcing Program
   Designed for IMMEX registered companies that perform manufacturing or services on behalf of IMMEX-certified companies who lack facilities to produce or manufacture products themselves.