One, and welcome to our Mexico Customs Market Update. We are going to give it just another moment as people start to flow into today's webinar, and then we will get started with a few housekeeping items and an introduction of our speaker. Bear with us just a moment, and we will kick things off. Okay, I'm going to go ahead and get started just to be respectful of everyone's time. I'm sure we'll have plenty more people joining us as everyone's calendars start to remind them what's next in their schedule today. Again, you are joining us for the Mexico Customs Market Update presented by Expeditors. My name is Samantha Hirsch, and I will be supporting as host here in the background as David Sanchez, our speaker, gets started with content here in a bit.
If you have any questions or issues, you're welcome to email me through the email address that you received your confirmation email from, and I'll be happy to support you as best as possible. A few housekeeping items we'll go through. David, if you can progress to the next slide. We're just going to go over a quick disclaimer here. Obviously, if you joined one of our webinars before, you've heard us mention that this webinar content is for informational purposes only. We do not encourage you to rely on them, of course, for legal, business, or financial decisions. All the information that we provide is based on information in the public domain. It is just really we provide this content to support you from a knowledge base in your business and your supply chain.
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We are recording today, as you might have noticed, and we will provide those at the end of a short feedback survey that you will receive via email from myself, typically within about two hours of this event wrapping up. Now, at the end of that survey, I've had some people ask questions about this before. At the very end, when you complete it, it will give you a little new page that just says, "Thank you for completing the survey," and you should see a link right there on that page that will carry you to the landing page, and that's where you can find slides and today's recording. Just wanted to clarify that as I know some people have missed that in the past. Now, finally, how do I get information on future webinars? You can subscribe to our webinar invites as well as our market updates.
Now, just briefly, I'll introduce David and let him get started with the content. David Sanchez is with us today as our speaker, and he is our regional manager for customs for Mexico. David, I'll let you take it away.
Yeah, thank you very much. David Sanchez, I'm the, as some were saying, I am the regional customs manager for Mexico. I've been with Expeditors for 25 years and have already 35 years in the industry and job-related activities, Mexican customs, including customs official and private sector in Mexico. Mexico City, originally from. I am going to go to the agenda. We are going to review two main or two topics that are really affecting or that are really making an impact to how we used to do business and how we have to start thinking and moving towards the future. This is not necessarily totally new, but I hope that I can explain through the presentation or give you insights through the presentation on why you have seen so many changes and things going on in Mexico.
The agenda will be we're going to review the current customs environment and political environment. Customs will be the national applications and how the Mexican government has been moving on, and then the political environment is going to be more related to our relation, our corporate relation with the U.S. On the current customs environment, what has been going on? What has happened in Mexico since, I would say, for the past maybe three years now? The Mexican customs, they used to fall under the umbrella of the Mexican IRS. The Mexican government, they decided to use the military and the marine forces to handle all the customs operations. The rhetoric or the speech that the previous president pushed through in order to make this happen, it was that Mexican customs was extremely corrupt.
It was like a big or one of the biggest red flags within the Mexican government and within, in general, the country, that Mexican customs was extremely corrupt. By using the military, they were pushing against the idea that customs could be, you know, corruption could be controlled. Also, because of the government expense controls, that will also make sense because they will have a lot of savings by using a military force that has already, you know, were already paid, and they could avoid some, oh my gosh, some expenses. What happened in 2021, the Mexican government established that, you know, we're going to be creating the Mexican Customs Agency because in order for us to be able to have a bigger impact, the Mexican customs used to fall under the umbrella of the IRS, the SAT.
They said, "We're going to have an agency, a standalone agency that is going to look similar." They didn't say it, but, you know, the plan was for it to look similar to, you know, similar to the U.S. CBP, meaning that there's going to be military, there's going to be part of what we call the National Guard, which will be the same or similar to the CBP. They created this standalone agency with military and marine, or mainly military, and the support of the marine force in order to control and to, you know, to manage, handle the administration of all customs activities. What happened with this change? Keep in mind that, you know, the reason why the government switched to a military course in customs was because it was super corrupt.
What happened was the military, the face-to-face interactions with the actors of trade, which, you know, the importers and exporters, the Maquila industry or the, you know, the manufacturing industry, the Mexican brokers, and the legal assessors that used to be groups that had very good interactions with customs. The face-to-face interactions, pretty much they went south. They were reluctant, the military, because, again, one of the initial or the first, the main reason why they got into customs was because customs was super corrupt. And then all the actors or all the groups interacting with customs, they were corrupt. There was a big impact on how those interactions happened. Also, a big thing in regards to support and consistency.
Support means that in the past, if there was an issue or, you know, some differences between the criteria between customs administrations, let's say, you know, on the East Coast and on the West Coast of Mexico, Manzanillo, Lázaro Cárdenas, we, the brokers, the maquiladora or the IMEX industries through our legal assessors, what I call legacy groups, old legacy groups, we had the door open with the authorities like 24/7. We were able to, in weekly meetings, point out and to, you know, present this type of situation, you know, type of, again, different criteria. Customs will issue what we call local ruling, circular.
They were actually issuing rulings in order to provide consistency throughout the ports and applicability for, you know, whatever new law, new requirement, if there were some doubts, including pushing some changes in the law, in the foreign trade rules, in order for those criteria to become part of the law eventually. That was a big support because that, you know, made the process very clear for all parties. Also, we add consistency because, you know, as a national broker or broker that we operate in pretty much all ports of entry, then we did not have to guess what was going to be the criteria of each port of entry. That was also because of, again, the relation and the fear of corruption. That is something that was lost through the changing process.
In addition to the, again, the legacy groups, what I call, which is the CAR and the Customs Brokers Association, legal assessors and the manufacturing Maquila industry, we also have all the official bulletin. So we do not have that consistency. We do not have that open door anymore. You know, we have like a door is open for us to be there. However, communication-wise, it was diminished, all the efforts and all the progress that those groups have made, you know, it is for now it is gone. In addition to that, what happened? The Mexican customs, again, they are thinking about that, you know, some of these groups or, you know, we as actors, mainly the brokers and the IMEX industry, the importers and exporters, who were part of the corruption.
They started a lot of investigations in order to, you know, check, confirm, review what was going on with the Mexican imports. At the end of last year, and we're going to touch base on this in the political environment also because, you know, it's like a combination of situations. The Mexican government, they actually start suspending and in the process of revocation of several brokers' licenses. You know, if you're dealing and you have business in Mexico, it's very likely that you have, it's very possible that you have had issues with a license and that you have to switch to a backup. Most likely, it's very possible, very probable that your process has been disrupted for a couple of weeks, maybe, you know, a couple of days at least. The Mexican brokers, they are undergoing this scrutiny and the Mexican government is suspending licenses.
As of last week, the information that we have from the Brokers Association is that there were 41 licenses suspended. Remember, they're in Mexico because the Mexican government previously or in the past, and still, but the idea was, why do we need to interact with a couple of hundred thousands of importers and exporters? We rather just work or push the law and compliance through the brokers. There were about 800 brokers in Mexico, and they have suspended about 5%. This week, we learned that additional brokers' licenses have been placed in suspension.
The Brokers Association, we don't have a clear when and if those licenses are going to be able to recover, meaning that if they're going to be, the hold or the suspension is going to go away or they're eventually going to be revoked because they're in that process of revocation. Also, what we've seen with the IMMEX or the maquiladora industry is that there's been a lot of cancellations of the IMMEX, the maquiladora programs for entities. Suddenly, they, one morning, they just wake up and they don't have a valid program anymore, or they are pushing the ropes, I would say, from the VAT certification, which allows, again, you know, the VAT certification allows the IMMEX, the maquiladora industry to import goods without a 16% flat VAT or value-added tax that we have in Mexico.
They require the VAT certification in order to waive or to defer those taxes at the time of entry. We also have seen a lot of movement of the VAT certification cancellation, meaning that if you import a couple of million dollars in goods or in some cases technology, they import way more in value, now they're subject to 16%. That's a process killer because the flow and for the IMMEX entities, the maquiladora that are not really used to pay those types of amounts, you know, it makes impossible for their process to keep, you know, to keep a certain level of volume and value. In addition, yesterday, during the daily conference of the president, Sheinbaum, she actually talked about this. It was just yesterday.
They were talking about the additional investigations now to the Mexican Recintos Fiscalizados, the fiscal precincts that operate very similar to the FTC. They mentioned that they are under investigation because, you know, they fear or they have a clue that possibly these types of locations, service providers, they are pretty much supporting or promoting what they call the technical contraband, meaning that goods are imported into these locations without, these are either duty-free or duty-deferred. However, once in those locations, they are allowing goods to enter the national market without payment of the value-added tax and service tax, which is, again, I think it's lack of understanding how these locations are used because mainly these locations are used for, and the IMEX and also the RFCs, the FTCs are used mainly to keep inventories for manufacturing.
It is raw materials that are kept in these locations. The idea that those raw materials somehow are entering the national market, we have to think that Mexico, we really do not have an industry. All the industry is foreign. It is your companies, foreign corporations that establish in Mexico with their own technology, with their own resources, meaning equipment, machinery, and Mexico only provides the manufacturing. I think that there are many things going on with the changes in government, in how they are not that new government anymore, six years with the new party, with the left. I think the idea and the understanding of all the previous years of foreign trade is not there. I still have some doubts, and I think they are acting in a way that, you know, is hurting in general the process.
It is hopefully that things can change eventually. With this change with customs, the transition to the ANAM, meaning the Agencia Nacional de Aduanas de México or Mexican Customs Agency, previously operating under the SAT, under the IRS, the system, the customs system is owned still by the IRS. The system was designed as a revenue generator, a revenue collection system where the main or the principal function of the system was to show duties, taxes, and, you know, in general, payments. The Mexican customs is creating its own system. It was actually the second week of February. I think it was announced everywhere that it was going to be some testing in the system the first week of February, and it was moved to the second week of that month.
It was actually some tests that authorities were doing with the new customs system and also the single window. It was mainly the connectivity because the single window, Mexican customs and in general, the government agencies are fully paperless. They had to make sure that the connectivity was working with what is going to be the new system. Still, it is not the new system that, you know, we went back to the IRS one, but, you know, you can expect in the next months, we are going to be transitioning. It is possible that back then in the test week, we had to use the single window in a, it was like a contingency. They prepared a special contingency to upload and to submit documents to the single window, which actually ended in three days. Everything was okay.
It is likely that when we have the full implementation, we may have or we may experience one week of some sort of delays. The reality is that during testing in February, everything went well. Lastly, on customs, they understand that they had a lack of background in customs, which was, you know, criticized and it was openly mentioned and discussed. The Marine Corps, the Ministry of Marine, it is a Ministry of Mexico, Secretaría, it's a Secretary of Marine. They actually developed a customs and national security and foreign trade. There are two degrees that they have, you know, they implemented. It is only a degree. It's more like a minor. It's a two-year program. They can extend the minor to a major, like the full four-year program for customs careers degrees.
They are, let's say that, you know, pushing and making intervention as much as possible in order to change that reality that, you know, when we started, again, the transition, they had zero, zero background on customs. And now, you know, with experience and now with the careers, they're trying to shift that into a more, you know, hopefully efficient and better experience with we actors of the foreign trade. Just a few pictures on the system also, there's a system of new operation system from customs from the ANAM is more focused on operations and security. The SAT was fully, you know, tax duties, fiscalization, monetary revenue, not generation, but revenue, safekeeping. Now the system, Mexican customs system is more focused on security and the operation side. We're going to move on to the political environment. Political environment.
I will split the current situation in two stages: the pre-election, the U.S. pre-election, and then post-election. What happened during the pre-election, and we are going to go in the next slides in more detail. During the pre-election, what the Mexican government was doing and listening, it was that, you know, Mexico was supporting or helping or not controlling Chinese goods coming into the U.S. Pretty much, Mexico was facilitating this triangulation of goods coming from China. What the Mexican government, they want to, and I think this is something that, you know, it is doing in a correct way, the government, there is an obvious alignment of Mexico with the U.S. trade works, not today, not this year, not, you know, it has been going on, I will say, for quite some time now.
It was made more obvious previously, election with, you know, during the, you know, maybe a couple of past years that Mexico was really making us, again, many actions in order to safeguard and to keep a good relation, showing support with the trade works against China. You know, we're going to go in more detail in the following slide. The post-election, meaning post-election is going to be the tariffs, right? What is going on in Mexico and what is really happening with the tariffs in Mexico? It's important because I've been part of several, I would say maybe three, four, maybe five conferences and presentations in regards to how the tariffs apply in Mexico. Most of them, after, you know, April 2nd conference, they say, or the rhetoric and comments are, you know, Mexico was not part of the tariffs.
Mexico has a second chance. It is obvious, you know, it is the U.S. law. I do not understand it very well. I, you know, I can talk about this because, you know, we have a huge, amazing Laredo, so I have a huge team filing entries every day, and they actually support me and help me out to understand this. The Mexican, or most of the Mexican area, is kind of wrong. We do have rates in Mexico that are still in aluminum. You all know that they do apply. We have the vehicles and auto parts at 25%. USMCA or not, still aluminum is the same. USMCA or not, it is irrelevant.
Vehicles, of course, the portion for USMCA, the portion of U.S. national production, regardless if it's USMCA or not, can be subject, you know, they can be, they're not subject to the duties or they can be deducted from the price. Then we have the fentanyl and immigration tax at 25%, except for USMCA, that's where we do have an exception. If Mexico complies with U.S. or meets U.S. expectations on reducing and fighting both the fentanyl and immigration, we will get a 30% reduction. The best case scenario as of now is that Mexico will be at 12% on the IEPA rate. The IEPA is not applicable to Mexico because it's already inclusive in the other rate. This is what Mexico is leaving. I think that in general, the market and the actors, not government, but the actors, there's still lack of understanding.
It is complicated because, you know, there are two sections and there is the IEPA. It is hard to understand the difference if you are not part of it. The government, I think they do have a clear idea of what is going on. Again, there are actions that are being followed and taken in order to, let's say, attack the current situation. Number one, the most important is that Mexico decided, and I will say later in February, Mexico decided not to retaliate against the U.S. Because initially, the first maybe couple of comments or, you know, comments on Mexican government, both from the President, Sheinbaum, and Minister of Economy, Ebrard, in both cases, they were saying that they will be looking into retaliating and they were looking to, you know, they will be applying rates in, and they will still, we are figuring it out.
However, now, and since I would say a couple of months now, the Mexican government has been clear that there's no reason and there's no case and, you know, just keep fighting and increasing and the rates is not going to be good for anyone. No retaliation from Mexico as of now. What happened in the pre-election? As I mentioned, the Mexican government, it was obvious that it was aligned with everything that Mexico was doing with increasing rates and applying additional restrictions to Chinese product, countervailing duties. It was obvious that that was the direction. We had it finally, let's say something tangible, something more objective. On July 10th, the White House, you know, presented this communication stating that both President Biden and President López Obrador, they made an agreement to protect mainly the steel and aluminum market.
This was like, now we have the picture clear that Mexico was really, you know, supporting the U.S. and, you know, it's in Mexico, definitely in Mexico best interest. This was, you know, I would say a very good tactic and a very good step that Mexican government took. Because normally Mexico, and I'm from Mexico, Mexico City originally, you know, we don't like to be manhandled. Also in politics, it is hard for us and, you know, in our pride, it is hard to say, okay, we're aligned, we're going to support, we're going to help. We'll try to present ourselves as we're, you know, fully independent and, you know, that is not the case.
The reality is that we depend, again, very much on the U.S. market, but not only the market because, you know, we are not, we're producers, we're not producers, we're just maquiladoras. We're just assemblers of materials and we transform materials, we transform assemblies of assemblies or parts that we get from the U.S. companies mainly and that we end up sending back to the U.S. where they actually belong. This is a good step in my opinion for Mexican government in order to, you know, just to make sure that we understand where we're sitting and that we act and we create activities based on those facts.
Still during the pre-election and the items that I mentioned that Mexican government took to, you know, go by the trade works is there was a duty, a decree or Mexican government increased the duty rate for over 500 HTS goals, mainly affecting Chinese origin goods. Even though it was general and the Mexican duties are not triggered, the duty rates, the general duty rates, I mean, they're not triggered to specific countries like the U.S. rates are. It was obvious that because of statistical information, they were affecting mainly goods coming from China and also mainly the steel and aluminum products. We were again aligned with the U.S. We started restriction to the Rule 8.
Rule 8 is a special operation that allows the import of, you know, several goods for transformation through a special operation chapter 98, meaning that all the import, as far as it's for manufacturing, all the possible import requirements are not, these products are not subject to. There was the Mexican Ministry of Economy through the, let's say, the very, very light years of the Mexican trade, they opened the option to import steel, mainly steel products under this Rule 8, meaning that they don't have companies who do not have to declare the actual quantities. They just have to declare like lots of products. Because they have the entities that are allowed to import under this special program, they, you know, they are considered trustworthy and, you know, they're not going to be using steel to sell in Mexico. That's the reality.
Who sells steel in Mexico? Actually, who consumes steel in Mexico other than these manufacturing facilities? In order to be aligned with the U.S., and this was unfortunate because not everything is unfortunate. This was very unfortunate. Mexican Ministry of Economy said, we're going to remove that option, that benefit. Manufacturing industries, they can no longer obtain, just a few of them, they can obtain the Rule 8 or this special benefit. Pretty much what I've heard and what we have heard from customers in Mexico is that even though they can apply or you can still apply to obtain the benefit, there's no response from the Ministry of Economy. Pretty much you cannot use the benefit. You have to complete the full process to obtain the steel import permit, which is, you know, it can be very, very, very long and hard to take.
You know, like you need now to register your mill test. In order to obtain these permits, you need a mill test certificate. And those mill test certificates, they have to be registered now through a single window with, you know, not a single window, but to the Ministry of Economy. The Ministry of Economy can take all the time they want. Pretty much that's how they are enforcing or making sure they are giving out additional permit certifications. Once you have your Mill Test Certificate in the Ministry of Economy, it really facilitates because now it's there for good. You can use that document, approved document for, you know, any amount of steel imports that you might need. Then the countervailing duties or antidumping duties.
This is a screenshot that I used in late October last year in order, you know, to, you know, this same topic presentation. We were explaining that there was a lot of movement to countervailing against China. You can see it's a lot of steel, a lot of plastic that is used in the auto industry. There were about 10, 11 in late October, early November. This is the new one. Just from starting this year, we moved or we increased the countervailing duties to China and revisions, investigations from about 10, 11 to 36. The Mexican government, it's really pushing and aligning with the U.S. trade wars and making sure that it's visible. Just additional restrictions for IMEX.
I already mentioned this and, you know, it's obvious that all the actors, meaning the brokers, the IMMEX, importers, exporters, we are subject to both the local environment and also the political international environment. Also, this political alignment, the reason why they started the investigations against the maquiladoras, the RFEs and the brokers, it was actually because they were thought by the government to be the ones supporting the triangulation of Chinese goods into the U.S. We have the three, we already discussed these three situations with the bad certifications and the broker license suspensions. In this one, I will say, make sure that if you're dealing with Mexico, that you have a really formal business continuity plan, that you have backup licenses because unfortunately, it's not unlikely that you may suffer some sort of disruption.
In our case, we work Expeditors, meaning we work in Mexico with 25 licenses and three of them, they have been affected. Fortunately, we have a formal business continuity plan, so we have backups in all our locations. Again, the transition was, I do not want to say easy, but it was there. We just, you know, need to provide additional steps. If you are not prepared with the backup, then pretty much there is no way you can import through those ports. The licenses have been completely suspended. They are unoperational. Also, the U.S. tariffs, and this is going to be very short because the Mexican government in early January, they presented what is considered like the long-term development plan for the country. It is called the Plan México.
It was in the news and they presented, not sure if people recall, but in Mexico in the past, we used to have the Hecho en México made in Mexico stamp with an eagle. They revamped the eagle and they revamped that program to make sure that, you know, have a long-term plan. I will call it the Mexico-Brigham plan because it really is based on increasing and moving manufacturing into Mexico, making sure, you know, there's plans not only for the manufacturing space, but also simplification of processes. I'm going to go very quick through this information because, as you said, this is a screenshot of the official document and it says first draft. It is not really the final plan. It is public. It is, you know, available on the internet, but still the document shows that this is a first draft.
It's not the plan and the document shows some dates, estimate dates that they have not been met, obviously, because there's some other issues like the rates and other priorities. We're going to go through very quickly through the plan because, you know, eventually this is going to be, I will say, you know, hard and the Mexican government is going to pursue most of these elements. What they want to do, they want to promote relocation to Mexico. They need to increase or they want to increase the regional content, Mexican content. They don't talk about regional value for USMCA because, you know, Mexico has plenty of free trade agreements. They just want to increase the regional value by substitution, import substitution, meaning they don't want to import. We want to produce in Mexico.
This is the relaunch of the Made in Mexico program, that the eagle that I mentioned, that, you know, it is like, it's going to be like the sign or, you know, the standard is going to be used and it's going to be like the diagram or, you know, of this entire plan. Create more jobs in multiple manufacturing sectors. The manufacturing sectors are very, very specific. Those are very, well, very specific in the draft. Increase the level of domestic procurement, meaning that, you know, plants and also buy from buying efforts from the Mexican government. They want to do it domestic. Promote regional development in certain areas and also specialization. They do talk about specialization and increase the level of education in middle and superior, meaning the minor and major level.
They want to focus more on engineering and more instead of social sciences, more on technology to have, you know, again, increase the Mexican participation, including intellectual property. These are the main, you know, like the objectives, economy. They want to, government, they want to be within the top 10 globally in GDP. Increase investment in order to make sure that, you know, we can have the development because still locally we do not have the resources. Create 1.5 million. This plan is to until 2030. I forgot to mention the plan is for the next five years accomplished by 2030. Create 1.5 million of jobs. Increase the national production or national content in 50% with the Made in Mexico. Increase the content also on export goods in these five, mainly these five industries: automotive, aerospace, electronics, semiconductors, and pharma. Increase public acquisition, 50% to everything national.
Create vaccines. Something, again, it's funny, you know, Colonel Levitt mentioned a few days ago that, you know, we need to, U.S. is looking to create some vaccines. Mexico, I don't know, I'm not sure if it's related because, you know, they're from different types. Again, it's very similar to U.S. policy. Reduce bureaucracy. Everything, I would say in Mexico, it's fully, almost fully paperless through a single window. All the current requirements in order to establish an entity in Mexico, some of them, they are still, they require, you know, presence of a person in front of the authority. Everything is going to be, for this plan, everything is going to be moving to an electronic environment. Just a few details in that document that I was mentioning, the Mexico plan, there's very, you know, clear information on, again, the industries.
In automotive and electromobility, they want to increase production by 10%, the national content by 15%. Mexico wants to, they have the plan that we would like to start building our own brand. It's called the Ollin. It's a fully electric vehicle. In order to promote this, they're going to put back the Rule 8. Remember the benefit that I mentioned that no one can use it today? Here they are acknowledging that in order for this to happen, they have to re-implement or make available some benefits that are really, you know, it's a must-have in order to have a correct flow of operation. Aerospace, be within the top, sorry, top 10 in production global, increase the national content by 10%.
Some dreams about going to space, which, you know, I find hopefully they remove this from the draft, meaning that it's not that objective in my opinion. On semiconductors, we want to double, we already have a semiconductor manufacturer in Mexico, want to double by 2030 the supply to the manufacturing sectors. Reduce the dependency in 10% only. I found that funny. I think it's more reduced dependency should be grow the regional content, but I think 10% is low, but again, it is part of the initial draft. Collaborate with the U.S. It's clear that now there were some questions on the collaboration. It collaborates with the U.S. Funny to mention that the document, the draft Plan México, actually mentioned collaborate with the U.S. and they do mention several U.S. agencies, including USAID or USAID. Finally, chemical and oil industries.
Also, the Mexican president established a few months ago that they think that there's not going to be, or most of the oil is going to be used in Mexico. There's not going to be exports of oil because they want, they're going to be using and they want to develop the secondary and third industries of conversion of oil into plastics and, you know, other types of products. They expect that after three years, growth is going to be 10% because still they have to, you know, put things in the ground, making sure that, you know, the manufacturing and all processing is there. Just make sure that, you know, they need investment. They want to bring investment in order to be able to promote this expectation, this goal.
In summary, you know, there's many changes going on still with Mexican customs, both in still getting the last, let's say, impact from the change from a military custom to have its own agency. Still, the relations are not very good. At the end of, you know, last year, they looked or, you know, maybe half 2024, the relationships, they looked like they were going in a good way. Suddenly, with the new president, like everything, you know, we just went backwards. We don't have the best relations. Uncertainty, the environment, we don't know what's going to happen, both with Mexican customs, internal process with the customs agency, and then with the trade and the tariffs. We don't really know. It is really, we do know that there's been going on several issues with brokers.
Make sure that you have a contingency plan, one, maybe two additional brokers or, you know, within your current provider that everything is ready, you know, just to switch, right? There is a national plan focus or that it's still a draft, but looks like it's going to be focusing on relocating, bringing more investment and production to Mexico. Mexico is really looking to promote specialization of technology and also education. That's it. I think I'm a few minutes over. I'm sorry for that, but I hope you have found this information interesting and helpful. Absolutely.
Thank you, David, so much for all of that content. We know there's a lot of changes, obviously, going on in Mexico customs as well as here in the U.S. We appreciate all the insight. We do have a couple of questions. We've got about five more minutes left.
We'll try to hit as many of those as we can. There was one question that came in, David, about the steel and aluminum products. They basically were looking for clarification if you were referencing finished steel and aluminum or specifically raw product.
In Mexico, one of the very good things about the Mexican requirements is that they are identified by the Mexican HTS. That's by the foreign trade law. In order for you to know what your product is subject to, requirements, or also benefits, that's why always in Mexico, we're going to ask, hey, what is the HTS? So we can figure it out. That's the reason why. These are still, it's more in the raw forms, meaning that, you know, flat, flat shape. There's a couple of requirements, you know, but mainly it's going to be raw or primary products.
There is a couple of secondary products, maybe some bolts, nuts, and some other type of articles. They are also subject to it, but mainly they are in their primary forms. Okay. I do not know if you touched on this one. Someone asked for an update on textiles and IMEX. I am not sure if that is clear enough. One of the also actions that they have taken to IMEX is not really textiles. I think that there is a, again, in the industry, I think that people that it is or information there, they said textiles cannot be imported by IMEX entities. That is not true. It is upper it, which is not the same as textiles. Chapter 61, 62, and 63 of the tariff means 61 and some of the 94. I am telling you what, 61 is knitted goods. 62 is non-knitted or woven, non-woven goods, meaning apparel, jackets, pants.
63 is accessories, accessories made of textile. Chapter 94 is bedding clothes. Those are the ones that are restricted to be imported to the IMEX. Only those ones. It makes sense, you know, manufacturing industry, why they will be importing, you know, maybe uniforms or maybe, you know, clothing for their employees. Other than that, those are the restrictions on. It's not textiles. It has to be with apparel and articles of textiles for bedding or house in general.
Thank you for that clarity. I think we have time for one more at least. This may be one that several people are curious about. We had a question about the current timeline for from start to approval. Basically, how long should people expect it to be taking for a USMCA paperwork?
I believe this is probably related to paperwork for USMCA qualifying goods, if I'm guessing correctly.
Yeah, that is going to be, again, with the tariffs, this is going to be moved. It depends. To qualify a good, definitely, there's a huge analysis that involves the enterprise system, meaning that what is your bill of material to understand if the product qualifies, meaning the tariff switch and also the tariff change and the original value content. I will say it's not really, once you have that information, which should be available in the Mexican, it's part of the IMEX and the Maquiladora control. You should have that information, let's say, ready available. I think it's more in the amount of parts. When I started working for Expeditors, I used to be a senior consultant at Detroit.
I was based in Detroit and for our industry, and we used to classify. Having all the information, all the product information in a single place, the estimate was only to classify 50 parts per day. If you add the revision of the origins and the bill of material and the rule of origin, I will say that it will take maybe a couple of hours. I will say my estimate is a couple of hours for each SKU, for each part in order to confirm if it qualifies or not.
Definitely a lengthy process and probably even more companies working to try to get that qualification, correct?
Yeah, I believe it.
Resources will be likely needed and required in order to.
Absolutely makes sense. Definitely expect delays there. I think is the message, right? Definitely expect delays. Yes.
Yes, and in the past, maybe not qualifying a good will represents 2%. Maybe it was, let's say, cheaper or less expensive to bring goods into the U.S., paying 2%. Now at 25%, you know, it's different.
Absolutely. David, thank you so much. I do want to acknowledge that we see we have several questions left that we have not been able to get to, but we want to be respectful.
Send them my way, please, and I'll make sure to.
I will absolutely, David. Yes. We'll get them to you, and David will make sure to get your answers back to you all. Thank you so much for joining us. Again, you will receive a survey just to get your feedback on today's webinar.
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