By: Luis Gerardo Ramírez Villela
Tariffs are the rates of the general export and import taxes on goods and are regulated in Mexico in the General Import and Export Taxes Law (Ley de los Impuestos Generales de Importación y de Exportación) and the Foreign Trade Law (Ley de Comercio Exterior).
In this sense, the Foreign Trade Law establishes that tariffs may be:
- Ad-valorem – when they are expressed in percentage terms of the customs value of the merchandise;
- Specific – when they are expressed in monetary terms per unit of measurement; and
- Mixed – when it is a combination of the two previous ones.
These tariffs may take one of the following forms:
(a) Quota tariff, when a tariff level is established for a certain value of exported or imported goods, and a different rate for exports or imports of those goods that exceed such amount; or
(b) Seasonal tariff, when different tariff levels are established for different periods of the year.
It should be mentioned that the government – through the Executive Power – may establish any other type of tariff that it considers convenient and any others that are provided for in accordance with current international treaties.
In this respect and under the current context of the imposition of tariffs by the United States of America on Mexico and other countries, the potential response of the government will involve the imposition of tariffs on products that come from such country.
It is important to understand that the possible consequences can be diverse and not only affect the country on which the tariffs are imposed, but at a global level they can have a great impact on the stock market and inflation and would also have an impact on the country that imposes the tariffs.
Although, as of today, it has not been defined which products will have tariffs by Mexico towards the United States of America, we are facing a possible global trade conflict in which the interests of each country will come into play, and this could have an impact on attracting foreign investment.
It is worth mentioning that the imposition of tariffs under the T-MEC by any of the participating countries could generate controversies and disputes under it, but at the same time they could open a door for the relationship between Mexico and Canada to open and begin to generate greater activity between both countries.
It will be important to stay informed about the tariffs that will be imposed soon and to stay advised by experts in foreign trade, tax and legal matters to identify any potential risks in your commercial operations.
