Mexico imposes high tariffs on US-produced cosmetics

The tariffs are estimated to affect approximately $2.4bn in trade with the United States, including 36 agricultural products and 53 industrial products.

The latter category contains a significant number of personal care products, which the Mexican government lists as shampoo, toothpaste, fragrance, deodorant and skin care products.

Import tariffs raised 10 - 20 percent​

Most of the personal care products on the list will be taxed an additional 20 percent, while 33 of the products will be levied with a lower rate of 10 – 15 percent.

The USDA says it has alerted all industry associations that deal with products affected by the tariff increase, which in turn is expected to alert any members this might be affected.

The goverment’s action is most likely to affect US business in the southern states, namely Texas, which is the state that trades most with Mexico, and Arizona.

Bad news at a bad time​

The news comes at a bad time for many personal care players exporting to Mexico as they struggle to stay profitable in the face of the economic downturn.

Small- to medium-sized companies are expected to be hardest hit, as many of these businesses are not large enough to have established manufacturing bases in Mexico, instead having to rely on exporting their goods into the country by road.

Smaller players will be harder hit​

US personal care companies that are active in the Mexican market include all the big players, such as Procter & Gamble and Johnson & Johnson, as well as smaller companies such as the Texas-based manufacturer Helen of Troy.

The Mexican government says it chose to raise the tariffs after the US government’s decision to end a pilot scheme to allow Mexican trucks into the US.

The Mexican government claims that ending the scheme goes against trade policy established by NAFTA that regulates trade between the two countries, which was estimated to have totalled $151.5bn last year.