Mexico's latest tariff policies may affect Temu and Shein, two major cross-border e-commerce platforms that focus on Chinese goods.
the SAT, Mexico's tax authority, introduced a series of new tariffs this week, most notably a 17%-19% tariff on small shipments imported through couriers.
The 17% tariff is levied on goods between $50-$117 if they are imported through courier companies in the U.S. and Canada that are signatories to the free trade agreement USMCA (United States-Mexico-Canada Agreement).
The policy is aimed at countries from which Mexico does not have an international treaty, China being one of them, and cross-border e-commerce companies Shein and Temu, which rely on Chinese supply chains, may be directly affected.
According to Mexican authorities, the new policies are primarily aimed at preventing the importation of some tax evading products, strengthening the "fight against abusive behavior", ensuring a level playing field for Mexican companies and protecting jobs in the industries involved.
Mexico is one of the fastest-growing e-commerce markets in the world, and Shein and Temu have sizable market shares in the country.
A report by Grupo Bursatil Mexicano shows that in April 2024, Temu had 15 million monthly active users in Mexico, compared to 10.1 million for Shein.
Temu has been available in Mexica since May 2023 and quickly became one of the most downloaded shopping apps in Mexico.
Shein and Temu have been among the top three most downloaded apps in the shopping category in Mexico for the past year.
Shein has primarily used the opening of pop-up stores to expand into the local market, while launching a credit card that offers up to 20,000 Mexican pesos of credit, among other things.
Temu has adopted a "local-to-local" model in Mexico to reduce operating costs and transit times.
In fact, Shein and Temu have encountered similar problems in other countries. For example, the U.S. has proposed in September 2023 to eliminate duty-free treatment for certain low-value goods.
The European Union is also preparing new measures for cross-border e-commerce platforms, including a new tax on e-commerce platform revenues and an administrative processing fee per item.
From July 1, 2024, South Africa has imposed a 45% import tax plus VAT on all imported clothing, following a 20% duty on low-value parcels.
Both Shein and Temu have also responded positively to the impact of policies related to overseas markets.
A Temu spokesperson has said that the platform's competitive pricing comes from supply chain efficiencies and operational expertise, not from circumventing rules or exploiting tax loopholes.
Shein, on the other hand, has joined the Section 321 Data Pilot program launched by U.S. Customs and Border Protection. The company emphasized that its participation in this program is a commitment to improving operational transparency and meeting global trade compliance standards.
