On December 19, 2024, President Claudia Sheinbaum signed a Decree modifying the Tariff of the Law of General Import and Export Taxes and the Decree for the Promotion of the Manufacturing, Maquiladora and Export Services Industry (IMMEX), which increase the Learn more about its implications here.
Objectives of the decree to protect the Mexican textile industry
The modifications included in the Decree have the following objectives:
- To encourage the development of the national industry and promote fair market conditions.
- To protect the mexican textile industry, preventing companies from abusing current IMMEX provisions, according to the Secretary of Economy, Marcelo Ebrard.
- To protect the approximately 400,000 jobs that exist in the textile sector
What does the decree to protect the mexican textile industry consist of?
Increase of tariffs
The first article of the Decree modifies tariffs of 138 tariff fractions to a level of 35% on imports of manufactured goods, as well as the 15% import tax on textile goods, classified in 17 tariff fractions. To see the list, please refer to the following link.
Validity: The 35% tariff applicable to the merchandise will be temporary and in force until April 22, 2026, which will become effective the day after the publication of the decree.
Free Trade Agreements: This measure does not affect imports of goods subject to tariff preferences provided for in free trade agreements.
IMMEX Changes: Restrictions on the temporary importation of textile products
The second article of this measure modifies Annex I of the IMMEX Decree, which lists the tariff items that cannot be imported under the IMMEX program as temporary imports. In this sense, the government lists 302 tariff items, which correspond to chapters 61, 62, 63 of the LIGIE Tariff, as well as one tariff item of chapter 63 and two items of subheadings 9404.40 and 9404.90, in Annex I.
Why? According to the Secretariat of Economy, the government detected IMMEX companies that temporarily import these goods and sell them as a final product in Mexico without paying duties, instead of incorporating the imported parts into a final product for eventual export under the IMMEX program.
Consequently, the third article of the Decree eliminates the 302 tariff items of section C of Annex II of the IMMEX Decree, which allowed obtaining an extension of the IMMEX program to temporarily import such goods from chapters 61, 62, 63 of the LIGIE Tariff. Validity: The modifications related to the IMMEX program will be of a "permanent" nature.
VTZ Comment
Subject to an in-depth analysis, we consider that the Mexican Government is introducing a harsh measure against the maquiladora industry, affecting companies that duly comply with their IMMEX obligations. In short, the saying "the innocent suffer from the sins of the guilty" is relevant. Consequently, maquiladora companies that use the inputs now listed in Annex I of the IMMEX must import the goods under the definitive regime, or else look for new suppliers, preferably from countries with Free Trade Agreements.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
