Many U.S. retailers are having to rethink their sourcing and fulfillment strategies after the Mexican government announced increased tariffs on textiles and finished apparel products.
The tariffs, announced Dec. 19, are protective measures for the Mexican textile industry, designed to reduce the impact of low-cost apparel imports from China, Mexican authorities said.
“No one knows what to do. That’s the key piece. Everyone is exploring options right now,” Ryan Martin, president of distribution and fulfillment at ITS Logistics, told FreightWaves in an interview. “I spoke with one of our major real estate brokers, and he’s saying that their leads inquiries went up an exponential percentage. Everyone is inquiring right now; they’re gathering all their information.”
Reno, Nevada-based ITS Logistics is 3PL providing end-to-end supply chain management and logistics services to businesses nationwide. It has 1.8 million square feet of distribution and fulfillment space in Texas, Nevada, and Indiana.
The tariffs increased by 15% for textiles and up to 35% for finished apparel products entering Mexico. Along with protective measures, Mexican authorities said the increased duties targeted cheaper imports from China.
E-commerce brands have been using the de minimis provision of Section 321, which allows importers to avoid customs duties on shipments valued at $800 or less by importing goods from China into Mexico before shipping them to the United States.
“These are measures to protect one of the most important industries in employment in our country, which is almost half a million people,” Marcelo Ebrard, Mexico’s economy secretary, said in a news release. “If these measures are not taken to avoid abuse or prices that are dumped or that may be dumped, or that are too low, then our national industry is at a disadvantage.”
President-elect Donald Trump said that on his first day back in office on Jan. 20, he will impose 25% tariffs on imports from Mexico and Canada.
The tariffs are aimed at pressuring those countries to stop drugs and illegal migrants from crossing into the U.S., Trump said. He has also said he’ll impose an additional 10% tariff on Chinese imports to fight drugs coming from that country.
San Miguel Times
Newsroom
