The National Chamber of the Textile Industry (CANAINTEX) of Mexico and the National Council of Textile Organizations (NCTO) have come together to endorse the Mexican government’s recent trade decree, which imposes new tariffs of up to 35 percent on imports from across the globe.
In a letter to President Claudia Sheinbaum, the groups, which represent textile and apparel producers in the U.S. and Mexico, said the government’s Dec. 19 decision to implement new duties on finished apparel products like knitwear, jackets, and lingerie will help stem the flow of “illegal and subsidized products into our markets that evade tariffs, taxes, and fees and undermine our critical sectors.”
According to NCTO and CANAINTEX, China has been able to circumvent both Mexican and American trade laws by flouting regulations, like those laid out in the country’s IMMEX program, and illegally obtain duty-free benefits on shipments into the U.S. via de minimis or the U.S.-Mexico-Canada Agreement (USMCA).
“Despite the legal efforts of Mexico and the United States to prevent the importation of goods that are undervalued, made with forced labor or with tariff or regulatory restrictions, we have seen firsthand how the Asian market has gained an unfair advantage through predatory trade practices, displacing companies and workers in the USMCA industries and undermining our critical coproduction chain,” the groups wrote.
The textile and apparel coproduction chain between the U.S. and Mexico supports hundreds of thousands of jobs, they added. However, according to the country’s economy minister Marcelo Ebrard, the Mexican apparel and textile industry has shed more than 70,000 jobs over the past year alone, in large part because of displacement by foreign-made imports.
The tariffs on China-made products will allow Mexico to build back its domestic textile sector, the letter added. By making the country a less hospitable trade environment for Chinese imports, market demand will increase for domestically made products, they believe.
“Regrettably, Mexico’s job loss has been astronomical in this sector,” NCTO president and CEO Kim Glas told Sourcing Journal. The U.S. textile sector, too, has taken a major hit—25 plants closed in the past 18 months—and Glas attributes the loss of business to foreign shipments deluging both markets.
“The distress that the Mexican industry is feeling is being felt throughout the hemisphere, including here in the United States,” she added. “My understanding is that the Mexican industry has been raising the alarm with the economic minister and with the new president around job loss, revenue loss to the Mexican government, and how non [free trade agreement] partners are benefiting.”
According to Glas, Chinese exporters and others are “essentially legally trans-shipping goods through Mexico via de minimis” to the U.S. They’re also “not being penalized for subsidized products coming into the Mexican market that are putting their industry at a significant disadvantage.”
Goods meant for export through the country’s IMMEX trade program—which allows for the duty-free importation of garment inputs, provided they are exported during a particular time frame—are making their way into the hands of Mexican consumers. Importers of these products aren’t paying import taxes, nor are they being properly taxed on the sales that they’re making in the country illegally.
The new decree provides a much-needed antidote to these issues, according to CANAINTEX chairman Rafael Zaga Saba. The apparel and textile manufacturing sector’s contribution to Mexico’s GDP has fallen from 3.6 percent two decades ago to 1.8 percent in the third quarter of 2024.
“We have been facing eight consecutive quarters with a decline every single quarter; for eight quarters, we have been losing jobs and losing [market] share,” Zaga told Sourcing Journal. The outcry from the industry prompted the government to review its market data, which revealed that “China and Asian products—finished garments particularly—were killing our market.”
From Zaga’s perspective, the Mexican government is clear-eyed about the threats that China poses to the sector, and “is putting a lot of effort into making the hemisphere stronger on textiles, and work within USMCA rules.”
The revisions to the country’s IMMEX trade program will be particularly helpful, he believes.
The decree strengthens the spirit of the program, which was meant to give Mexican importers access to apparel inputs not available in the domestic market. Instead, it’s allowed Mexico to become a stopover for finished garments coming from China, with sometimes little to no finishing by Mexican manufacturers, he said. Often, goods are shipped into Mexico to warehouses near the U.S. border, and simply repackaged for shipment into the U.S. That cuts Mexican producers out of the equation.
Now, finished goods like coats, jackets, suits, pants, dresses, sweaters, bed linens, curtains, and towels will be explicitly banned from the program, though importers will still receive duty-free benefits on several fabrics, yarns and other components.
“The IMMEX program works perfectly fine when we are talking about raw materials or other items that will [undergo] a transformation and that will put some work back into Mexico to export to other countries,” Zaga said. “We don’t want to be a bridge to… send all these garments—finished garments made in China—that Mexico doesn’t do anything besides pack.”
Zaga believes the legislative moves will ultimately strengthen the co-production chain between American textile manufacturers and Mexican producers.
“Between the U.S. and Mexico, we have a very tight relationship. We buy a lot of fabric. We buy a lot of filament yarns. We buy a lot of cotton. So we are complementary to one another, and this will benefit a lot the industries of both countries.”
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