A Guide to Importing Goods from Mexico to the USA Without Hassle
Importing products from Mexico to sell in the US can be a profitable endeavor if done correctly. With the right preparation and knowledge of import regulations, your cross-border business can thrive. This comprehensive guide covers everything you need to know to import Mexican goods legally and smoothly.
What Paperwork is Required to Import from Mexico to the USA?
- Determine if you need an importer of record number. This EPA issued number helps track and regulate imports. Not all products require one. Vehicles, food, cosmetics and hazardous materials do need IRNs.
- Register with the Automated Commercial Environment. The ACE is a CBP portal to manage trade information electronically. An ACE account lets you track shipments and pay duties/fees.
- Obtain an Employer Identification Number from the IRS if you don’t already have one. This EIN number identifies your business for tax purposes.
- Research HS product codes and fill out forms for your shipment’s classification. Harmonized System codes classify imported goods for tariffs and data tracking.
- Arrange proper transportation and supply chain logistics from Mexico. Hire a freight forwarding service or customs broker to assist.
How to Clear Customs When Importing from Mexico to the USA
The key to smooth customs clearance is advance preparation and vigilance at every part of the import process. Follow these tips:
- Screen your Mexican supplier thoroughly to ensure legitimacy. Get references and verify business licenses.
- Inspect products before export to ensure quality and compliance with US standards. Reject defective or illegal items.
- Get a binding ruling from Customs if you’re unsure of an item’s admissibility, classification or duty rate.
- Provide all required Product Safety certification documents to avoid customs delays.
- Monitor your shipment’s route closely and be ready to pay any owed customs duties immediately upon entry.
- Maintain meticulous record keeping of your imports for 5 years in case of an audit.
Avoiding Costly Mistakes When Importing from Mexico
With preparation and care, your Mexican imports can avoid these common pitfalls:
- 1. Inaccurate paperwork leading to penalties or shipment delays. Double check HS codes and other info.
- 2. Failure to meet US labeling, marketing or safety standards. Research CPSC rules thoroughly.
- 3. Poor communication with suppliers and customs brokers. Maintain constant contact to foil problems.
- 4. Attempting to avoid lawful duties and tariffs. Don’t misclassify goods; it’s illegal.
- 5. Underestimating logistics needs like freight and storage. Plan for it in your import budget.
How to Reduce Customs Duties when Importing from Mexico
- Seek guidance on duty drawback programs that refund already paid tariffs.
- Check if your goods qualify for lower NAFTA rates or other trade preferences.
- Consider warehousing goods in Mexico then shipping smaller duty-free amounts to the US.
- Process goods further in Mexico before exporting to shift classification to a lower duty rate.
- Research free trade zones for duty-free manufacturing and storage options.
Why Import Goods from Mexico vs Other Countries?
There are clear benefits to importing from Mexico versus other origins:
- Proximity and low freight costs
- Established trucking and rail routes
- Free trade agreement tariff reductions
- Familiar business culture and practices
- Ability to visit and inspect factories/goods
- Time zone alignments for communication
- Lower language barriers
With proper planning and regulatory compliance, importing from Mexico to the USA can be smooth and profitable. Just educate yourself on import laws, find a reputable Mexican supplier, and maintain vigilance at every step. The opportunity for success awaits.
The Rising Tide of Imports from Mexico
Imports from Mexico have been steadily growing over the past two decades. Since 1995, the value of goods imported from Mexico has increased by over 500%. In 1995, the USA imported around $50 billion worth of products from Mexico. By 2018, that number had swollen to over $350 billion annually. This rapid growth shows Mexico’s importance as a trade partner.
The reasons for this import upsurge are Mexico’s close proximity, their lower labor costs and the 1994 NAFTA agreement which eased trade restrictions between the two countries. Mexico is now the United States 2nd largest supplier of imported goods after China. Top import categories include vehicles, electrical machinery, mineral fuels and machinery. If the current trends continue, Mexico may overtake China and Canada as the number one source of foreign products to the USA.
Shifting Trade Balances Between the US and Mexico
While imports from Mexico have boomed, exports have not kept pace. In 1990, the USA actually had a trade surplus with Mexico, exporting $5 billion more than it imported. Now the relationship has flipped. The 2018 trade deficit with Mexico topped $80 billion, a historic high. This growing imbalance has led to some political tensions between the two trade partners.
President Trump sought to remedy this gap by negotiating the new USMCA trade deal in 2018. It contains provisions intended to bring more auto and manufacturing production back to the United States. However, the agreement has not yet caused any material decrease in imports from Mexico. The COVID-19 pandemic did dampen 2020 trade, but volumes have already rebounded in 2021. Imports from Mexico seems likely to keep growing for the foreseeable future.
References:
https://www.justice.gov/oig/reports/ATF/e1101.pdf
https://www.trade.gov/us-mexico-trade-facts
https://www.piie.com/blogs/trade-investment-policy-watch/covid-19-barely-slows-flow-goods-mexico
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