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Mexico slaps retaliatory tariffs on U.S. goods

Mexico Tariffs on U.S. Goods

Effective immediately starting June 5, 2018, Mexico announced increased duties on a number of U.S. and other foreign-origin products.

Mexico’s El Diario, its equivalent to the US Federal Register, has responded to the recent United States’ Section 232 tariffs on steel and aluminum originating in Mexico (among other countries). Mexico has published new duties to be applied to “definitive” imports, which are equivalent to “consumption entries,” in the United States. Consumption entries in the U.S. apply to imports that will ultimately be consumed or used in the United States, for example.

U.S. Goods Included

Basically, the announcement states that NAFTA preferential tariff treatment has been suspended for several categories of U.S. origin including:

  • pork
  • cheese
  • apples
  • cranberries
  • potatoes
  • ham
  • whiskey
  • steel products of various types classified in Chapters 72 and 73 of the Mexican tariff schedule
  • aluminum products classified in 7615.10.99
  • fans classified in 8414.59.99
  • vessels classified in 8903.92.01
  • furniture classified in 9403.20.99
  • lighting articles classified in 9405.10.99

 

The New Duty Rate

The goods listed will be subject to 15%, 20%, or 25% duties.  To view the list of classifications and new duty rates, read Article 2 of the Decree.  Also, if any good has a marking, label or legend on it that indicates the good is of U.S. origin, it will be treated as being of U.S. origin – even if the origin of the good, as determined under the regular rules of origin, is not the United States. It is important to note that the aforementioned tariffs will not apply to any IMMEX transactions.  Pork and Cheese will start at 15% or 20% duty, but will increase to 20% on July 5, 2018.

Article 3 states that anything classified in Chapter 72 and Chapter 73 will have a new duty of 15% regardless of the origin, in order to protect any possible shipment diversions.  In order to protect IMMEX entities from having to pay the new duties on certain products, PROSEC has extended some benefits to some specific classification numbers in Chapter 72.

 

Other Countries

Canada and the European Union also have future plans of tariff retaliation.

In fact, according to American Journal of Transportation, “Mexico said on Monday that it will complain to the WTO over the U.S. measures, saying that it violates the organization’s agreement on safeguards by not having been adopted in accordance with the procedures provided, in addition to violating the General Agreement on Tariffs and Trade. The U.S. tariffs have been condemned by nations across the world, with Canada last week announcing it will impose tariffs on as much as C$16.6 billion ($12.8 billion) of U.S. steel, aluminum and other products from July 1.”

 

Source:

Pisani and Roll LLP

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