On April 22, local time, Mexican President Lopez signed a decree to impose temporary import tariffs of 5% to 50% on 544 commodities, including steel, aluminum, textiles, clothing, footwear, wood, plastics and their products.

Screenshot of the original Mexican official text

The decree takes effect on April 23 and will be valid for two years. According to the decree, textiles, clothing, footwear and other products will be subject to a temporary import tariff of 35%; round steel with a diameter less than 14 mm will be subject to a temporary import tariff of 50%. Goods imported from regions and countries that have signed trade agreements with Mexico will enjoy preferential tariff treatment if they meet the relevant provisions of the agreement.

Gabriela Siler, director of economic analysis at BASE Financial Group in Mexico, believes that tariff measures may lead to increased inflationary pressure in Mexico, and "protectionism does not work anywhere."

Textile industry develops rapidly

As one of the world's major textile and apparel trading countries, the textile and apparel industry plays an important role in Mexico's national economy. Mexico's textile and apparel industry has a complete range of products, including traditional Mexican textile products such as narrow blended fabrics, plain weaves and knitted fabrics, as well as various types of yarns, fabrics, home textiles, non-woven fabrics and clothing. The Mexican fashion industry is also promoting the continuous technological innovation of clothing products and vigorously improving the competitiveness of the textile and clothing industry. Industry experts predict that the market size of Mexico's textile manufacturing industry will grow by US$3.98 billion between 2021 and 2026, with a compound annual growth rate of 4.13%.

The most important market for Mexican exports is the United States, accounting for about 80%, and the remaining 20% is exported to Canada, China, Spain and Brazil. Overall, although U.S. apparel imports in 2021 are still dominated by Asian suppliers, Western Hemisphere Free Trade Agreement suppliers, China-ASEAN Free Trade Area (CAFTA) countries and United States-Mexico-Canada (USMCA) partners are all experiencing strong growth. In 2021 alone, Mexico's clothing exports to the United States increased by 21.52%. Industry experts predict that Mexico's apparel exports could reach $7 billion this year. Among them, strong sales of denim clothing, knitwear, T-shirts, underwear and socks are seen as the main factors driving growth.