Mexican President Claudia Sheinbaum is considering imposing tariffs on small imported goods from China to boost revenue, protect jobs in domestic industries, and offset the nation's budget deficit inherited from her predecessor, Andres Lopez Obrador.
The proposed tariffs would target low cost products bought from platforms like Temu, Shein, AliExpress, and Alibaba, which circumvent import duties while oftentimes failing to meet the technical standards for products that required for domestic manufacturers.
Mexico currently has a de minimis threshold that permits duty-free imports from all countries, including China, for shipments valued up to $50 USD. Shipments valued between $50 and $117 are exempt from duties but are subject to a 16% VAP. For shipments exceeding $117, both duties and VAT apply. In comparison, USA has higher de minimis threshold of $800.
Finance Secretary Rogelio Ramirez de la O said that Sino-Mexican trade relations were “not reciprocal” and that it was “only logical to expect that both Americans and Mexicans demand our fair share of this global demand.”
El Universal reports that the “unfair competition” from Chinese e-commerce platforms eliminated at least 20,000 textile industry jobs in the country and reduced apparel manufacturing by 8%.
Governmental data show that this year Mexico will face its largest budget deficit in more than 30 years, reaching 5.9% of its GDP. Sheinbaum aims to reduce this to 3% next year, which will require bringing in additional tax revenue.
The financial plan, along with any new tariffs (which have yet to be determined), must be submitted to Mexico's Congress by mid-November for approval.
Watch out China — you may have flown too close to the sun with all your de minimis shipments, and now countries want to even the playing field for their domestic retailers and manufacturers. As reported in September, the USA is also looking to revise its de minimis loophole, which I highly encourage.