Mexican January 2026 Tariff Tsunami: Maquilas Aren’t Immune
On January 1, 2026, Mexico will increase its general import tariff rate (known as the most favored nation (MFN) rate). The increase will be in the range of five to fifty percent, impacting 1,463 eight-digit tariff lines encompassing thousands of products originating in countries with which Mexico does not have a free trade agreement (FTA or the measure). The measure´s December 29, 2025, Diario Oficial de la Federación (DOF) publication contains no sunset date for announced increases, along with a hint that the Ministry of Economy could implement a process to reduce the just-imposed tariffs to guarantee the availability of inputs in competitive conditions (the Ministry would establish relevant details, if it decides to pursue such option).
Out of the seventeen industrial sectors covered by the measure, the lion´s share (80%+ in scope) covers textiles (approximately 28%, covering 418 tariff lines); clothing (approximately 21%, covering 308 tariff lines); steel (approximately 18%, covering 268 tariff lines); plastics (approximately 5%, covering 79 tariff lines); auto parts (approximately 5%, covering 74 tariff lines); paper and cardboard (approximately 3%, covering 50 tariff lines); footwear (approximately 3%, covering 49 tariff lines); and aluminum (approximately 2%, covering 38 tariff lines).
Because many significant trading partners, such as China, South Korea, India, Malaysia, Thailand, and others, do not have FTAs with Mexico, the increased tariffs could have a significant impact on the cost of importing goods into Mexico for many importers.
Are Maquiladoras (aka IMMEX companies) going to be affected by this measure?
Even though it is commonly believed that Maquilas/IMMEX companies in Mexico enjoy a blanket-exemption from paying import duties on their inputs, the destination country of the finished goods is of vital importance.
Under the USMCA´s “Lesser of the Two” rule (section 2.5), customs duties could exclusively be reduced, waived, or refunded in an amount notexceeding the lesser of: (i) the duties to be paid on the non-FTA inputs imported into Mexico, or (ii) the duties payable in the USMCA destination-country upon importation of the finished goods.
As per such rule, it is possible that, depending on the inputs-vs-finished-good tariff line combination, temporarily exempted duties by Maquiladoras in Mexico could end up having to be paid — or not — depending on the tariffs or customs duties for the finished goods in the U.S. or Canada.
For example, if a non-FTA input for an auto part is subject to 25% MFN import duties in Mexico beginning January 1, 2026, and the finished auto part (A) pays, say, 10% tariffs upon importation into the U.S. for not being USMCA-compliant, the Maquiladora would end up paying the remaining 15% in Mexico, as it could only exempt the Lesser of the Two import duties (U.S.´ 10% in this case); but, (B) if the auto part is not subject to import duties in the U.S. due to its USMCA-origin, the Maquila would have to pay the full 25% on the non-FTA input in Mexico as the Lesser of the Two is equal to zero.
It is worth noting that the 5% to 50% tariff increase could be reduced for companies, IMMEX or otherwise, that qualify for a Sectorial (PROSEC) or Eighth Rule program. Under these programs, specific inputs are authorized to be imported at reduced import duties if used to manufacture a limited amount of goods within a specific economic “sector,” such as automotive (automobile and auto parts), steel, electronics, and others.
Do you know whether and how the measure´s tariff increase and USMCA´s Lesser of the Two rule may affect your IMMEX operation, or your IMMEX´s supplier operations? If you have questions regarding how Mexico´s tariff increase may affect your company´s supply chain, or if you want to be sure that your company is taking steps to mitigate against this or similar situations, please contact the authors of this article or your Foley relationship attorney.
Many thanks to Law Clerk Maite Aranzabal for contributing to this piece.
