Mexico has ramped up tariffs on products affecting its domestic textile industry, but the move has nothing to do with returning U.S. president Donald Trump.
In fact, its neighbor to the north, as part of the United States-Mexico-Canada Agreement, will be exempt from the import hikes, which will jump to 15 percent on 17 categories of textile merchandise, including denim and polyester staple fibers, and 35 percent on 138 finished clothing products such as knitwear, jackets and lingerie, Mexico’s economy minister Marcelo Ebrard announced Thursday during a press conference.
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The tariff increases, which will stick until April 22, aren’t aimed at any particular country, Ebrard said. Instead, the move is designed to bolster Mexico’s textile industry while protecting it from the unfair competition that has resulted in an average 4.8 percent erosion in its annual gross domestic product and the loss of 79,000 jobs over the past few years.
The decision is also being paired with restrictions on what can be imported through the import duty-deferral program known as IMMEX, which Ebrard said is being abused as a tax-free loophole for the domestic sale of raw materials and components designated for the production of goods headed for export. If this “door” isn’t closed and the Mexican industry continues to be undercut by bad actors, another 72,000 jobs could disappear, he added.
“With this, we’re going to promote the development of national industry because a strategic objective of shared prosperity is to increase the national content of everything we consume,” Ebrard said. “The more Mexican content there is, the more jobs there will be in Mexico promoting fair market conditions.”
While this round of increases is origin-agnostic, Mexico has imposed tariffs on goods from specific countries with which it doesn’t have trade agreements, most recently aluminum, plastics and steel from China. The tariffs were seen as a response to U.S. concern that cheap Chinese products could be using Mexico as a covert entryway into North America, where they could undermine local production and, again, jobs. This was boosted further by an announcement last month that the Economy Ministry will be conducting so-called “cleaning” raids across all 32 Mexican states to stem the flow of illicit products, mainly from China.