Mexico | Temporary nature of textile tariffs must be enforced; emphasizing customs control

Summary

Mexico imposes temporary tariffs of 15 to 35% on 155 tariff items in the textile and clothing industry, modifies the Immex Decree to limit access in these sectors. Finally, it establishes a global rate of 19% on products imported through digital platforms from countries without a trade agreement, including China.

Key points

• Key points:
• Tariffs on textile products can support an industry that has lost competitiveness, partly due to the entry of illegal goods but also due to idiosyncratic factors.
• However, they must be strictly temporary to incentivize the industry to improve its competitiveness. The established period (until April 2026) seems adequate and should not be extended.
• It is worrying that the tariffs have been imposed without documenting unfair practices, although we do not rule out that they exist. Justifying their imposition based on a trade deficit is a mercantilist argument, similar to those used by President Trump to impose tariffs on several countries.
• Tariffs reduce competitiveness by preventing capital from flowing to more efficient sectors and increasing consumer costs.
• Public policy efforts should focus on strengthening customs control to prevent the entry of illegitimate merchandise into the country and, critically, its possible export to the US, which could risk the trade relationship and the T-MEC review process.

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