After Trump won the 2024 US election, tariffs became a daily topic among textile workers, and many overseas customers chose to place orders in advance. But what no one expected was that before Trump officially took office and the US tariff stick was wielded, Mexico's tariffs had already appeared.
On December 19, Mexican President Claudia Sheinbaum and Economy Minister Marcelo Ebrard signed a decree that imposed a 35% import tariff on 138 tariff categories of textiles and garments, and established a list of banned textile imports, thereby protecting 400,000 jobs in the textile industry. The new tariff decree took effect on December 20 and will be valid until April 22, 2026. The new tariffs will target products imported from countries that have not signed a free trade agreement with Mexico. China is included in the tax scope. Countries that are not subject to taxation include: the United States, Canada, the European Union, the United Kingdom, Australia, Chile, Peru, Singapore, Vietnam, Japan, etc. Mexican Economy Minister Marcelo Bismarck said that the 35% tariff on 138 new textiles is an "important supplement" to the textile tariff list implemented in April this year. On April 22 this year, Mexico announced that it would impose temporary import tariffs ranging from 5% to 50% on 544 items from non-free trade agreement countries, including steel, aluminum, textiles, clothing, footwear and other fields. In order to further protect the domestic textile industry, Mexico is "actively expanding the list of textiles banned from import." Bismarck said that some companies use textiles as raw materials for export goods, but sell them directly in Mexico to evade taxes. This behavior has seriously damaged the interests of Mexico's textile industry. Bismarck stressed that these measures are aimed at preventing the loss of jobs in Mexico's textile industry. The industry is directly related to the livelihoods of nearly 500,000 people, and in 2024 alone, Mexico's textile industry has lost 79,000 jobs. China is the largest source of imports of textiles in Mexico. From January to September 2024, China's textile exports to Mexico amounted to US$14.532 billion.
In recent years, domestic cross-border e-commerce has developed rapidly and has become a new export engine for textiles. However, cross-border e-commerce is not immune to the tax increase process. Recently, the Mexican Tax Administration (SAT) issued a new tax policy. From January 1 next year, all foreign companies selling products through e-commerce platforms must pay 16% value-added tax (VAT), with exceptions for individual goods, such as food and books.
Specifically, according to the Mexican Overseas Resident System, any foreign company that uses warehousing services in Mexico, that is, ships from Mexico, must register for VAT, such as cross-border sellers using Amazon FBA. If the operating company does not have an entity in Mexico, it must designate a local agent to register and apply for a VAT number (RFC).
At present, some mainstream cross-border platforms doing business in Mexico have issued corresponding tax rules. Amazon said that sellers using FBA must upload a valid RFC number to use the service normally, while other sellers are not affected and do not need to provide an RFC number. However, for sellers who provide RFC numbers, the platform will withhold 16% of VAT on their behalf. For sellers who do not provide RFC numbers, the platform will withhold 20% of income tax and 16% of VAT on their behalf.
According to Reuters on November 25, US President-elect Donald Trump said on the 25th that he would impose a 25% tariff on all goods from Mexico and Canada on his first day in office. Mexico and Canada are both the backyards of the United States, and Trump's tariff increase is mainly to combat re-export trade. From a practical point of view, it is not something that can be accomplished in a short period of time for the United States to return manufacturing, and Trump's tariff policy is more for its diplomatic service. Mexico's current round of tariffs on Chinese textiles is more like a token of allegiance to the Trump administration, showing its determination not to be a "Yangcheng Lake". However, from the actual effect, the countries that are not subject to tax in this round of Mexico's tariff increase also include emerging textile powers such as Vietnam, which has increasingly close trade relations with China, and Peru, which has just established the Port of Chancay. If products are willing to re-export from these places, they can also bypass tariffs, so the actual results are questionable.
