New Tariffs Anticipated for All Mexican-Origin Goods

New Tariffs Anticipated for All Mexican-Origin Goods

05/31/2019

U.S. Opens Another Front in its Trade War

On May 30, the White House announced that it will impose a 5 percent tariff on all Mexican-origin goods as of June 10, 2019. This additional tariff will increase to 10 percent on July 11, and by 5 percent each month thereafter until the rate reaches 25 percent on Oct. 1. These additional tariffs will remain in place until Mexico acts to address illegal immigration through Mexico into the United States. To view the official White House statement, click here.

These tariffs will be applied to all Mexican-origin products; therefore, members of The Vision Council with Mexican-based supply chains will be impacted. No information regarding exclusions or exemptions was published, nor was any information made available regarding the rules to be applied for determining whether an imported product is of Mexican-origin.

This action comes at a complicated time in U.S.-Mexico trade relations. Mexico, Canada and the United States recently resolved issues surrounding Section 232 duties assessed on steel and aluminum products. That agreement removed one obstacle to ratifying the United States-Mexico-Canada Agreement (USMCA), the trade agreement intended to replace The North American Free Trade Agreement (NAFTA). Whether Mexico agrees to move toward ratifying the USMCA considering yesterday's announcement remains to be seen. Retaliation of Mexico on the United States in the form of implementing duties on U.S.-origin products could further impact The Vision Council's members.

The Vision Council will continue to monitor the situation as it progresses and will keep the membership informed.

Any questions about this issue can be directed to Rick Van Arnam, The Vision Council's regulatory counsel, at rvanarnam@barnesrichardson.com.

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