Mexico Update - Increase on Export Duties and Amendment to PROSEC Program

November 7, 2017

By Luis G. Reséndiz

Citing current imbalances on the steel industry (including publications by the OECD), by decree published on October 17, 2017, the Mexican government increased the import duties on 97 customs tariff classification codes of iron and steel products by 15 percent. The same decree amended several provisions of the decree that established various sectorial promotion programs (commonly known as PROSEC programs) incorporating 11 customs tariff classification codes for steel and iron products that can be imported exempt of import duties. These benefits are granted to the PROSEC programs for the electric, electronic and automotive industries.

These changes may have a significant impact on companies operating in Mexico that import iron and steel products, including maquiladoras (or IMMEX) companies that use those materials in their production process. Companies that have a PROSEC program should verify if they can use that program to lessen or avoid the impact of the new import tariffs and whether they need to take affirmative actions (e.g. apply for an extension of their program) to obtain the benefits.