By José Manuel Martínez / Translated by Samai Páez
On December 19, 2024 , Claudia Sheinbaumand Marcelo Ebrard signed a decree to protect the Mexican textile industry, imposing temporary tariffs and limiting imports that could generate unfair competition.. According to World Trade Organization, tariffs are taxes applied to imported or exported goods to generate income, promoting local competitiveness, regulating trade and balancing the trade balance.
The president and the Secretary of Economy announced a tariff of 15% on imports of raw textiles and 35% on finished products based on fabrics, such as clothing, curtains and blankets, except in the cases of the markets with which Mexico has free trade agreements. Mexico has a network of 14 Free Trade Agreements with 50 countries (FTAs), among which China is not in this list. It is important to note that since January 1 of this year, a tax of 19% plus VAT of 16% has been applied to products sold through platforms such as Shein or Temu and even AliExpress. The policy will remain in effect until 2026.
In this sense, the President said that, although consumers buy products individually, the government she leads has identified that these items are purchased in large quantities, which allows their subsequent resale in the country, significantly affecting the national textile industry. In the National Palace, Marcelo Ebrard reported that in 2024 employment in the textile industry reached its lowest level, which translates into the loss of 79 thousand jobs in recent years. In addition, he stressed that the Gross Domestic Product (GDP) of this same industry has registered an annual decrease of 4.8%, which is equivalent to an approximate loss of 1,229 million pesos each year. He also said that unfair competition was already having a considerable negative impact on several states, especially in the State of Mexico, Puebla, Hidalgo, Coahuila, and Guanajuato, which are the main producers within the textile industry.
This decision comes in the context of Donald Trump's tariff threats towards Mexico, accusing the country of being a "backdoor" for Chinese exports and threatening to block the renegotiations of the USMCA. Imports from the United States and Canada, within the trade agreement with Mexico, will be exempt from tax if their value does not exceed 50 dollars. Products between 50 and 117 dollars will have a tariff of 17%. In addition, Mexico launched "Operation Cleanup" to seize contraband goods from Asia. Mexico is the main trading partner of the The US, absorbing 85% of its exports, which represent almost a third of its GDP.
DIVIDED OPINIONS
Internet users on social networks point out that the increase in costs in clothing and textiles will directly affect Mexican companies that will have to pay up to 1.5 billion dollars more, which also translates into higher prices for consumers, both in imported and domestic products. These types of measures do not combat informality, such as baleen clothingwhich competes with the local textile industry. According to national studies, baleen clothing in Mexico can generate profits of up to 500%, since it comes from the US market, recognized for its high level of consumption and for having well-defined seasons and trends. Once these seasons end, the products are discarded and reach the Mexican market. The National Chamber of the Textile Industry (Canaitex) reports that 80% of the clothing that enters Mexico comes from surplus commercial chains and is sold as if it were used clothing. This situation has generated concern in the textile and clothing industry, since, despite the laws that prohibit the import of clothes used in bales, it is estimated that around 27 billion kilos are introduced, which could generate more than 1,500 million pesos annually in sales in markets and tianguis.
According to analysts at Itau BBA, Amazon will be the company that will benefit the most from the changes, followed by MercadoLibre. It is estimated that approximately 30% of the products sold by Amazon in Mexico come, mostly, from the United States. For its part, MercadoLibre imports about 15% of its products sold in Mexico, mostly from China, according to the same report. Although the new tariffs will affect MercadoLibre products from China, analysts indicate that "the global impact should be positive in net terms" due to less competition.
Sources:
https://www.uniradioinforma.com/negocios/que-son-aranceles-son-importantes-n786588
