For some time now, the Mexican textile industry has been making efforts to ensure that the country has a “level playing field” with respect to foreign companies that sell undervalued products through temporary imports. Therefore, the decree to increase tariffs on manufactured goods by 35% and on textile imports by 15% represents support for their needs that will strengthen regional supply chains.
Rafael Zaga Saba, president of the National Chamber of the Textile Industry (Canaintex) , highlighted in a press conference that a decade ago the textile industry represented 3.6% of the GDP; however, today this percentage has been reduced to 1.8 percent.
He also stressed that more than 70,000 jobs have been lost in the industry over the past two years, and he hopes that, with this presidential measure, jobs will gradually begin to recover, in addition to an improvement in employment.
In this regard, Canaintex acknowledged Claudia Sheinbaum, President of Mexico, and the Secretary of Economy, Marcelo Ebrard, for having listened to their requests in just three months of management.
For his part, Sergio Contreras Pérez, executive president of the Mexican Business Council for Foreign Trade, Investment and Technology (Comce) , said that this “ is not a protectionist policy, it is a way of limiting ”, since the way of introducing this type of products to the country was left aside.
“We have had the need to review the sensitive issue of tariffs in a new strategy. Mexico does not have a great impact on the relationship with China like other countries. So perhaps we have stopped reviewing what the relationship with China should be, it is a way of reviewing the openness we have, and limiting it,” he said.
The other side of the coin
On the other hand, Logística de México (LDM) , a logistics consulting firm, acknowledged that although the measure is aimed at protecting the national industry, it will have a profound impact on the country’s logistics chain.
In this regard, he indicated that this will bring with it a considerable increase in operating costs that will affect both logistics companies and end consumers.
“The implementation of new tariffs on textiles represents a structural change for logistics in Mexico. Companies face the challenge of adapting their processes in an environment where operating costs will increase significantly. This involves redesigning transport routes, training personnel in more complex customs procedures and optimizing supply chains to reduce the financial impact on end consumers and businesses,” said José Ambe, CEO of LDM.
Among the most significant effects is the increase in import costs, since this measure could generate an annual additional cost of 1.5 billion dollars (mdd) in imports.
In addition, logistics costs, including transportation and storage, will also increase, with freight rates potentially rising by 5% to 10% , adding up to approximately $500 million annually in additional costs due to additional procedures and customs delays.
Other effects foreseen by LDM include high complexity in customs procedures, delays in delivery times, as well as an adjustment in the way companies plan their inventories.
Therefore, the impact of these new tariffs will translate into a total increase in operating costs of close to two billion dollars annually .
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