Mexico has unveiled yet another slate of tariffs on foreign goods to start the year as the country aims to keep a better eye on products from Asia shipped within its borders—potentially adding another hurdle for Shein and Temu in their penetration of the North American e-commerce market.
The Mexican government’s Tax Administration Service (SAT) slapped 19 percent tariffs on all imported merchandise shipped via couriers from countries without an international trade agreement with Mexico, such as China.
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Mexico’s trade agreement partners U.S. and Canada—joint members of the U.S.-Mexico-Canada Agreement (USMCA)—will see a 17 percent duty for products valued between $50 and $117. For products between $1 and $50, the 19 percent tariff will be maintained.
These tariffs went into effect Wednesday.
Previously, countries were not required to pay duties on goods of those low values, according to the SAT.
“With these actions, the SAT reaffirms its commitment to provide the best service to taxpayers in order to comply with their tax obligations, increase revenue, reduce tax evasion and avoidance and combat smuggling,” the agency said in its statement.
The tax authority said the tariffs will strengthen the agency’s battle against “abusive practices,” as Mexico looks to stave off the importation of tax-evading products. The new measures also are timed less than three weeks before U.S. President-elect Donald Trump’s inauguration. Trump has threatened 25 percent tariffs on all goods from both Mexico and Canada, with the soon-to-be 47th president long been critical of the country’s handling of immigration and border protection.
The president-elect has voiced concern over Chinese companies using Mexico as a back door to enter the U.S. market, arguing that it can affect local production and jobs.
Shein and Temu, both of which have supply chains and production capabilities firmly rooted and embedded in China, have leveraged tax-free imports into North America largely by shipping low-value goods directly either to U.S. consumers, or to warehouses set up in Mexico and Canada.
The two e-commerce giants wouldn’t be the only companies that will have to adapt to the new tariffs, as U.S. retail giants that ship low-value goods from China to Mexico like Walmart and Amazon would still have to pay some variation of the tariffs
American lawmakers have sought to reform the Section 321 de minimis provision leveraged by the major online players—which allows foreign shipments worth $800 or less to enter the U.S. market duty free. Lawmakers, law enforcement and U.S. businesses alike have been critical of the provision on the grounds that it is anticompetitive for many U.S.-based e-commerce businesses, and that it could be exploited for drug trafficking into the U.S.