INCREASED DUTIES ON CERTAIN U.S. (AND OTHER) ORIGIN PRODUCTS

 

Today, Mexico published in the Diario Oficial (Mexico's equivalent to the U.S. Federal Register), its retaliatory measures in response to the U.S. decision last week to impose Sec. 232 duties on Mexican origin steel and aluminum.  Importantly, the new Mexican duties do NOT apply to IMMEX (maquiladora) transactions - only to "definitive" imports (akin to "consumption entries" in the United States). 

 

 

Today, Mexico published in the Diario Oficial (Mexico's equivalent to the U.S. Federal Register), its retaliatory measures in response to the U.S. decision last week to impose Sec. 232 duties on Mexican origin steel and aluminum.  Importantly, the new Mexican duties do NOT apply to IMMEX (maquiladora) transactions - only to "definitive" imports (akin to "consumption entries" in the United States). 

 

The key points of the new Decree are:

 

1. Per Article 1 of the Decree, NAFTA preferential tariff treatment has been suspended for several categories of U.S. origin products such as: 

• pork
• cheese
• apples
• cranberries
• potatoes
• ham
• whisky
• 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

These goods will now be subject to 15%, 20% or 25% duties, depending upon the good.  See Article 2 of the Decree for the list of classifications and corresponding new duty rates.

 

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.

 

2.  New duties of 15% also have been established on certain articles classified in Chapter 72 and 73 that are NOT of U.S. origin in order to protect Mexico from diversions of those products to Mexico now that they are subject to increased U.S. tariffs.  See Article 3.

 

3. PROSEC duty benefits have been extended to several tariff classifications in Chapter 72 (7208.39.01, 7208.51.01 7211.29.02, 7225.19.99, 7208.26.01, 7208.27.01, 7209.16.01, 7209.17.01, 7211.29.02, 7225.30.99 and 7225.40.01)  to protect IMMEX entities from having to pay the new duties on certain products.

 

The above measures are in effect today (June 5, 2018), except for various pork products and cheese.  For these products they will be subject to 10% or 15% (depending upon their classification) immediately and on July 5, 2018 at the higher 20% duty rate set forth in Article 2 of the Decree.  By contrast, Canada and the European Union retaliatory measures are not yet in effect.