In a major shift that’s impacting the e-commerce industry, Mexico has recently raised tariffs on a wide range of imported goods, particularly those coming from countries without trade agreements, such as China. This breaking development is sending shockwaves through U.S.-based apparel brands that have long relied on Mexican fulfillment hubs to support their supply chains. With higher duties now applied to goods valued above certain thresholds, brands are being forced to reassess their strategies to stay competitive quickly.
Mexico’s tariff increases, which are tiered based on both the value of goods and the country of origin, will have significant consequences for brands that depend on the country’s proximity and cost-effective manufacturing advantages.
Mexico’s New Tariffs Target Asian Imports
Mexico’s new tariffs, designed to target global imports, introduce tiered duties based on both the country of origin and the value of goods. For countries with existing trade agreements, such as the United States and Canada, a 17% duty will apply to goods between $50 and $117. This lower duty reflects provisions in the United States-Mexico-Canada Agreement (USMCA).
However, goods from countries without trade agreements, like China, face a much higher 19% duty on items exceeding $1. This new tariff structure is set to significantly impact online retailers like Shein and Temu, which rely heavily on low-cost, high-volume imports that fall within these thresholds. These brands, which have been key players in the affordable fashion market, could see their business models severely disrupted by the new duties.
The broader aim behind these new tariffs is to curb tax loopholes in e-commerce. Prior to this policy shift, many products within these price ranges were entering Mexico duty-free, creating unfair competition for local businesses. This shift is expected to place a substantial burden on e-commerce giants, particularly Shein and Temu, whose models depend on ultra-affordable pricing.
Stricter Regulations and Broader Implications
The tariff hikes are part of a larger set of policies aimed at promoting local industries and jobs. President Claudia Sheinbaum’s administration, which passed a decree on December 19, raised import duties as high as 35% on specific goods, including clothing, home textiles, and camping equipment.
This tariff increase is also poised to impact Mexico’s IMMEX program, which historically allowed foreign companies to import goods tax-free for manufacturing and export, particularly to the U.S. As the new tariffs go into effect, industry insiders warn that this could disrupt the IMMEX initiative, complicating logistics and financial operations for businesses that rely on cross-border trade.
Why U.S.-Based Fulfillment Should Be Part of Your Strategy
If you're considering a reevaluation of your supply chain strategy for 2025, it's important to weigh the benefits of U.S.-based fulfillment. In addition to avoiding the complexities of international tariffs, U.S.-based fulfillment provides several advantages, including:
Faster Shipping Times: By bringing your products closer to your customer base, you can offer quicker delivery times, which can improve customer satisfaction.
Reduced Tariff Exposure: With fulfillment centers based in the U.S., you eliminate the risks associated with rising foreign tariffs, making your supply chain more stable.
More Control: Managing operations from within the U.S. provides better oversight and enables quicker adjustments if issues arise.
Convenience of Working with Inland Star
Inland Star offers a streamlined solution for U.S.-based fulfillment with strategic locations across the country, providing convenience and reliability for your business. Our facilities are strategically placed in key markets, ensuring quick access to major transportation hubs, making it easier for you to distribute products across the U.S. efficiently. Whether your fulfillment needs are nationwide or regional, we have the flexibility and reach to support your brand's growth.
We have locations in the following key areas:
Fresno (Corporate) – Positioned centrally in California’s agricultural hub, ensuring easy access to major west coast transportation routes.
Visalia, CA – Located in California’s Central Valley, providing an efficient distribution point for both local and national shipping.
Los Angeles, CA – A prime location near major ports, facilitating fast inbound shipments and swift distribution across the West Coast and beyond.
Harrisburg, PA – Strategically placed in the Northeast, offering strong access to key domestic and international trade routes for fast shipping to the East Coast and other regions.
With Inland Star, you benefit from comprehensive solutions that make it easier to manage your supply chain, optimize your inventory, and deliver products efficiently to your customers. We understand that flexibility, speed, and reliability are essential for your business, and our nationwide footprint helps ensure that you can meet those demands with ease.
Let Inland Star Guide You Through the Shift
Navigating the complexities of shifting your fulfillment strategy requires expertise and experience. At Inland Star, we specialize in helping brands navigate the evolving logistics landscape, ensuring they can pivot their strategies seamlessly. Whether you're looking to transition to U.S.-based fulfillment or simply reassess your current supply chain, we're here to help you make informed, strategic decisions that will benefit your brand in the long term.
For more information, visit inlandstar.com to collaborate on your 2025 strategy, or request personalized consulting with Doug Draper, Director of Business Development, at ddraper@inlandstar.com.
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