So many businesses, particularly in Apparel, are in scramble mode as a result of recent regulatory changes with Mexico, effectively closing down the practice of inbounding containers of product that are intended to go across the border to capitalize on the eCommerce de minimis loophole (no tariffs on transactions below $800). Brands are also aware that the US is likely to close the eCommerce loophole via changes to existing Section 321 de minimis laws. With the current and pending changes, it’s clear that the practice of inbounding goods to Mexico is likely coming to an end.
The Mexican government’s Tax Administration Service (SAT) imposed 19 percent tariffs on all imported merchandise shipped via couriers from countries without an international trade agreement with Mexico, such as China. The imposed 19% tax came shortly after Mexican President Claudia Sheinbaum escalated tariffs on finished clothing products, including jackets, dresses and shirts amongst other apparel items which will now have tariffs reach as high as 35 percent.
On top of all of this, Sheinbaum’s decree restricts duty-free finished apparel items from entering the country if it was intended to be re-exported to the U.S. through Mexico’s IMMEX import program.
The new measures are going into effect just weeks before Donald Trump assumes office. American lawmakers have sought to reform Section 321 de minimis legislation that is now being leveraged by numerous eCommerce apparel companies, where foreign shipments worth $800 or less are able to enter the U.S. market duty free. US businesses, CBP and politicians have been critical of the current loophole via Section 321 due to it being anticompetitive for many US-based e-commerce businesses, and that it could be exploited for drug trafficking into the U.S.
Program Freezes and AMS Support:
The bottom line with all of this is that Brands are now seeking US-based solutions for their supply chain logistics and Fulfillment. Some brands have been completely frozen by the actions taken in Mexico! AMS CAN HELP YOU! Give us a call and get your business back on track quickly. Our team is equipped to provide the necessary support to ensure a smooth transition and help you minimize downtime.
Call us today! (800) 931-4267
Source: (1) Supply Chain Drive (2) Yahoo News
