How the IMMEX Program Are Impacting Apparel Brands—and What You Can Do

How the IMMEX Program Are Impacting Apparel Brands—and What You Can Do-img

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    For apparel brands that rely on cross-border fulfillment, recent changes to Mexico’s import regulations present significant challenges. On December 19, 2024, President Claudia Sheinbaum announced a presidential decree that increased tariffs on textile goods and imposed stricter restrictions on temporary imports under the IMMEX program. These changes disrupt supply chains, increase costs, and force apparel brands to rethink their fulfillment strategies.

    Here’s what you need to know and how to navigate the evolving landscape.

    Overview of the New Regulations

    Effective December 20, 2024, the new regulations include:

    Increased Tariffs

    • Finished textile goods now face a 35% tariff, up from 20-25%.
    • Textile inputs are taxed at 15%, up from 10%.

    Restrictions on IMMEX Program

    • Temporary imports of certain textile products, such as clothing (Chapters 61 and 62) and made-up articles like towels and blankets (Chapter 63), are now prohibited.
    • This restriction disrupts duty-free operations previously allowed under the IMMEX program.

    The stated goal of these measures is to protect Mexico’s domestic textile industry, which has suffered job losses and economic decline in recent years.

    The Impact on Apparel Brands

    1. Supply Chain Disruptions

      Many U.S.-based apparel brands utilize Mexican warehouses under the IMMEX program for manufacturing and fulfillment. These facilities allowed brands to reduce costs and streamline cross-border logistics. With new restrictions, brands must rethink their operational models.

    2. Higher Costs

      The tariff increases significantly impact the cost of importing textile goods into Mexico for manufacturing or distribution. These additional expenses can compress profit margins, forcing brands to reassess their pricing strategies.

    3. Section 321 Challenges

      Apparel brands frequently rely on the Section 321 import program, which allows goods valued under $800 to be imported into the U.S. duty-free. This strategy minimized tariffs and optimized fulfillment. However, the new restrictions on IMMEX imports complicate Section 321 operations, especially for brands that rely on consolidated shipments through Mexican fulfillment centers.

    4. Border-Crossing Bottlenecks

      As more companies pivot to exporting goods directly to the U.S. without utilizing Mexico’s IMMEX framework, border crossings are expected to experience increased delays. These logistical hurdles further strain apparel brands’ delivery timelines.

    Strategic Solutions for Apparel Brands

    1. Reevaluate Fulfillment Strategies
      • Transition fulfillment operations to U.S.-based warehouses to avoid the complexities of Mexico’s new import restrictions.
      • Explore alternative nearshore locations, such as Canada or Central America, which may offer more favorable trade environments.
    2. Leverage Duty Drawback Programs

      If you’re importing goods into Mexico and later exporting them to the U.S., you may be eligible for duty drawback programs. This allows for partial recovery of tariffs paid on exported goods.

    3. Enhance Supply Chain Resilience

      Work with logistics partners to diversify your supply chain, reducing dependency on a single fulfillment model or location.

    4. Partner with Fulfillment Experts

      A trusted logistics partner can provide guidance, compliance expertise, and seamless fulfillment solutions to minimize disruptions.

    How CIRRO Fulfillment Can Help Apparel Brands

    • Custom Fulfillment Strategies

      We help you design alternative fulfillment solutions that align with your brand’s unique needs, including transitioning to U.S.-based operations or exploring other trade-friendly regions.

    • Seamless Compliance Support

      Our compliance experts guide you through the regulatory landscape, ensuring your business remains operationally compliant and cost-effective.

    • Scalable U.S. Warehousing

      With a network of warehouses across the U.S., we offer reliable storage, order fulfillment, and last-mile delivery solutions that minimize disruptions.

    Conclusion

    The changes to Mexico’s import regulations are challenging for apparel brands, but they also present an opportunity to rethink and strengthen supply chain strategies. By adapting to these new circumstances and partnering with experts like CIRRO Fulfillment, your brand can continue to thrive in an evolving global market.

    For personalized guidance and solutions tailored to your apparel brand, contact CIRRO Fulfillment today.