U.S. IMPACT OF MEXICO TEXTILE TARIFF INCREASE

On December 20, 2024, Mexico terminated a program that previously allowed U.S. apparel and textile importers to avoid paying duties by utilizing Mexican warehouses as fulfillment hubs through the Manufacturing, Maquila, and Export Services Industry (Industria Manufacturera, Maquiladora y de Servicios de Exportación) “IMMEX” program.

The Mexican government’s decree, announced on December 19 by President Claudia Sheinbaum and published in the Federal Official Gazette (Diario Oficial de la Federación) “DOF,” effectively restricts the use of Mexico’s IMMEX program for entire categories of apparel and textiles. This program had allowed businesses to defer duties on raw materials and components used in manufacturing goods intended for export.

IMMEX TEXTILE RESTRICTIONS

Key elements of the decree include:

• A temporary 35 percent increase in import tariffs on 138 Harmonized Tariff Schedule (HTS) codes that classify finished products.
• A temporary 15 percent increase in import tariffs on 17 HTS codes that classify textile products.
• Goods classified in Chapters 61, 62, and 63 and Subheadings 9404.40 and 9404.90 of the Tariff of the Law of General Import and Export Taxes are no longer eligible for temporary importation under the IMMEX program.
  • Exceptions include Subheadings 6117.90, 6217.90, 6302.91, 6302.93, and 6302.99, which classify fabric cuts for garment making. These products may continue to be temporarily imported under the IMMEX program.
• The decree is in effect from December 20, 2024, through April 23, 2026.

U.S. E-COMMERCE SUPPLY CHAIN IMPACT

This change is prompting U.S. e-commerce brands to consider moving fulfillment operations back to the United States or shifting to providers based in Asia. Both options, however, carry significant costs and risks. Utilizing U.S.-based third-party logistics providers (3PLs) would result in higher labor costs, although shorter delivery times could help mitigate some of these expenses. Meanwhile, shifting fulfillment to Asia might be more cost-effective for brands sourcing from that region but could expose them to regulatory uncertainties.

With the trade landscape rapidly evolving, e-commerce import volumes affected by these changes are expected to be redistributed among diversified 3PLs with less exposure to Mexico and global providers offering fulfillment services in the U.S. This period of transition presents both challenges and opportunities for the logistics sector as companies adapt to a changing regulatory environment.