If you are importing products for your business, it’s important that you consider several factors beyond simply the cost of the goods. Regulations, taxes / tariffs, lead times, as well as shipping costs are important factors of any business strategy. All of these elements will greatly impact your landed cost, and other vital aspects of your business.
So let’s discuss how to source products from Mexico, and why so many US businesses are increasingly importing from Mexico, why it might be beneficial as well as how you can make it work for your business.
Free Trade Agreement between the US and Mexico
Imagine two neighbors who’ve been swapping secret recipes over the fence for years. That’s a lot like the relationship between the US and Mexico. These two nations, separated only by a border, have been trading pals for decades. And guess what? Mexico isn’t just any trading buddy for the US – they are our largest trading partner in the world (as of September 2023), delivering a vital assortment of goods to the American doorstep.
Enter the United-States-Mexico-Canada Agreement (USMCA), the secret sauce to this trade fiesta. With USMCA grooving in the background, businesses large and small are dancing to the beat of nearly zero import duties on Mexican imports and NO 25% TRADE WAR TARIFFS!
And for the occasional goods that do get the tax spotlight? Their rates are slashed so dramatically, it’s like they’re on a clearance sale compared to other countries.
But before you get too lost in the rhythm, there’s one catch. To enjoy duty-free classification, products exported from Mexico into the US need to fit the USMCA criteria. The key rule? A designated percentage of the materials used to make the product must have originated in North America (US / MX / Canada).
U.S. Customs Rules and Regulations
When it comes to product imports, the requirements are established by the U.S Customs and Border Protection (CBP). The CBP will conduct a series of examinations, classifications, and appraisals for imports entering the US.
Here are some of the rules and regulations you should be aware of when importing products from Mexico:
- Entry Documentations
The importer of record or the purchaser will have to file entry documents to declare the contents and nature of the imported goods. This often includes the commercial or pro forma invoice and the packing list.
- Examination of goods
Next, the imports from Mexico will be inspected for national security. This process is often quick, and suspicious goods will undergo additional rounds of thorough examination.
This step will verify the value and quantity of the goods and their dutiable status. Additionally, the check will sieve out any prohibited articles such as illegal narcotics.
- Classification and Appraisals
Depending on the description of the merchandise, the CBP will then verify if the goods are provided with the correct tariff classification. If a product is dutiable, then the final amount of duty required to be paid will be determined.
For imports from Mexico, the CBP will check the certificate of origin to verify if the goods are eligible for a waiver of the import taxes.
- Restricted goods
While the CBP does not require an import licence to bring products into the US, certain products may be regulated by additional agencies. For example, drugs, cosmetics, and food may be regulated by the Food Drug Administration Agency (FDA) or the United States Department of Agriculture (USDA) respectively.
If you are importing these products, you may need to obtain additional documentation from the relevant authorities before your products can come into the US.
How to Find a Mexican Supplier
Finding the right supplier can make or break the success of your company. By far the easiest and fastest way to find a Mexican manufacturer is through an online directory. These marketplaces list many Mexican suppliers and their product offerings, as well as offer information on their facilities, their skill base and processes. This can help you develop a shortlist of manufacturers that specialise in your product.
Other common methods that businesses often use to locate Mexican suppliers include using search engines and word-of-mouth referrals, though these come with a larger degree of risk depending on the information source.
Once you have put together a shortlist, you can start the process of getting into contact to enquire further about your potential order, have them estimate a quote for you and ultimately determine if they are a good fit for your business.
Shipping Mexican Products into the United States
Once you have decided on the product to import, the next step would be to decide on a shipping process for your products. With the close proximity between Mexico and the United States, the shipping timelines are relatively short, and your imported goods are likely to reach you and your customers much faster than they would if you had to ship them overseas.
While the most common way to ship goods from Mexico is via truck, there are other shipping options available. Depending on your shipping timelines, the nature of your goods and the location of your manufacturing partner you could receive your order via rail or even air freight.
Start Importing from Mexico Today
Mexico is an ideal country to import products into the United States. Not only can you save on taxes and shipping costs, but the country also has a long history of manufacturing, giving them access not only to top of the line facilities, but a workforce with decades of experience in cutting edge manufacturing.
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