Introduction

Hey everyone. We’re looking at a(n) interesting, to an inordinate extent, change in how we shop online that’s occurring. Financial experts from Itaú BBA have spotted that Amazon and MercadoLibre are about to get a major boost. Why, Mexico decided to slap a 19% tax on cheap items coming in from some Asian shops, such as Shein and Temu.

But the U.S. and Canada don’t have to pay this tax. This means Amazon and MercadoLibre could start doing significantly better in Mexico. Are you curious about what will occur next in this whole online shopping disagreement? Let’s look and see what is going on!

Overview of Mexico’s New Import Tariffs

The government of Mexico announced in January 2025 that they’re bringing in new import tariffs. These are specifically designed to stop the large number of low-cost products coming in from Asian nations, especially China. By putting a 19% tax on items shipped through courier services from places that don’t have a free-trade agreement with Mexico, this marks a major change in how Mexico handles trade.

The reason behind making these rules is to address worries over fairness in Mexico’s local market and to close gaps that let businesses skip past older rules.

Details of the Tariffs

Mexico is now making items coming in from China more expensive by adding a 19% tax to them if they are shipped through courier services. This is because China doesn’t have a problem with Mexico that lets items come in cheaper. But if things are coming from the U.S. or Canada, it’s not the same because they have a nice deal for trading, meaning things can come in more easily.

Here, in this situation, if you’re getting something shipped into Mexico and it’s worth less than $50, you won’t have to pay extra taxes. But if it’s priced between $50 and $117, there is a 17% tax added to it. Mexico didn’t stop there–they went after the clothing industry hard. They decided to charge a 15% tax on raw textiles and a whopping 35% tax on items such as clothes and curtains that are ready to sell.

The major idea behind all of the aforementioned taxing, especially the weighty ones on items from China, is to change the market. Mexican officials are basically trying to stop Chinese companies that used to bring in their cheap, ready-to-sell goods and cause problems for the local businesses. It’s a new idea, disruptive to how things used to be, having the plan to give the local market a fair opportunity.

Impact on Asian Retailers

Asian retailers, companies like Shein and Temu, are somewhat surprised that new tariffs are hitting them utterly hard or difficult. They used to take advantage of not having to pay much for bringing items worth less than $50 into Mexico. This was their hidden tool to sell acceptable, cheap fashion and electronics. But now, with these tariffs, things are going to become more expensive for them to ship to Mexico.

That changes their method of beating the competition. Because of these higher taxes on imports, these retailers from Asia might have to look at their prices again. If they don’t, they could lose a lot of their customers to local shops or other businesses around the area. And in addition to everything else, these tariffs are part of Operation Clean-Up.

This plan is focused on catching illegal or wrongly labeled items coming from these countries. It means the government is watching everything much closer now–and checking very carefully to see no one’s dodging these new tax rules.

Amazon and MercadoLibre’s Opportunities

As the tariffs shift the competitive landscape, North American e-commerce giants Amazon and MercadoLibre find themselves in a promising position. Analysts at Itau BBA predict that these companies are likely to benefit considerably from reduced competition from Asian importers.

Amazon’s Strategic Position

Amazon is already of major importance in Mexico when it comes to online shopping, and it looks like they are going to get even bigger thanks to some changes in tariffs. The working theory is that about 30% of items people in Mexico buy from Amazon comes from other countries, and many of these items come from the U.S. Since the U.S. products don’t have to deal with a 19% tariff that items from Asia does, Amazon has a very good benefit.

This situation with not having to pay extra import fees means Amazon can sell things cheaper than the products that come from Asia. Because of this, more people in Mexico might begin to buy from Amazon instead of choosing the more expensive options. In addition, Amazon is very good at sending things quickly because they’ve made a big system for moving packages and work with several other companies to make it happen.

With better prices and quick delivery, Amazon is ready to get even more notice from shoppers in Mexico, pulling them away from the Asian products that cost more.

MercadoLibre’s Competitive Edge

MercadoLibre has a major chance to become more popular in Mexico and get more of the market. This is especially true since about 15% of its items come from China, but still, experts at Itaú BBA think it’s mostly good news for MercadoLibre. They say because there’s less competition, MercadoLibre can really understand what customers in the area want and do a very good job at giving those things.

A reason of which, the company has some positive features that make people want to keep coming back. Items including MercadoPago for paying online and MercadoEnvíos for shipping items create this entire ecosystem where shopping is very easy and everyone is glad to stay. If MercadoLibre keeps making these services better, they’re definitely going to be of major importance in how people shop online in Mexico.

Net Positive Effects for E-Commerce Giants

The new tariff policy from the Mexican government is making things fraught for some, but it’s actually setting up Amazon and MercadoLibre for success. Because of these tariffs, they’re getting rid of some competition and are being pushed to hone their approach. This means they have to add more local products and might end up offering more jobs by using items from Mexico.

With fewer cheap products coming in without tariffs, Amazon and MercadoLibre have to start introducing local goods and really focus on making their operations better. They are somewhat forced to go back to the beginning and think through new ways to grow, which could end up being good for them. They are expected to hone their approach not only by selling more but by getting creative with technology, getting closer to their customers, and setting up a system that could lead the way for how things are done in other places, too.

And because they need to keep up with more people wanting items, they may potentially put money into the Mexican e-commerce scene. Even though some businesses might find it tough because of these tariffs, Amazon and MercadoLibre are looking to make the most of it. They’re getting ready to not only keep their top spots in the market but also help change how online shopping works between countries in North America.

Broader Economic and Trade Implications

As Mexico enforces its new import tariffs, several broader economic and trade implications are emerging. The imposition of a 19% tax on imports via courier services from countries without a free-trade agreement notably impacts Asian retailers that previously enjoyed tax exemptions. This move seeks not only to disrupt the advantage held by Asian e-commerce entities like Shein and Temu but also to bolster local and regional players.

Relations with the U.S. and Canada

The new trade laws have changed how Mexico deals with its peers in the north, the U.S. and Canada. Now, if you’re buying items from these countries and it’s under $50, you don’t have to pay any extra fees, which is very good for helping people work together with money in the area. But if what you’re buying is priced between $50 and $117, be prepared to pay a 17% fee.

Even though this makes things a bit tougher for items in that price range, the trade agreement still gives Mexico, the United States, and Canada some special perks. These benefits are there to make it easier for the three countries to work together and keep their trade flowing smoothly. While there are some new rules to deal with, the overall sense is that these changes could still keep the trade deal between Mexico and its North American neighbors strong.

Mexico’s Efforts to Curb Contraband from Asia

Mexico’s Operation Clean-Up is a strong move to deal with the issue of illegal imports messing up local businesses. This effort is especially aimed at stopping the flood of cheap products from Asia, with China being a main focus, since they’re often blamed for pushing their underpriced goods into markets and messing up fair competition.

By putting these regulations in place, Mexico is trying to protect its economy and make sure its own producers have a fair shot. The push for tariffs is because Mexico wants to stop the wave of contraband coming from Asia, making it an important step in their conflict to keep their industries safe.

Market Reactions and Predictions

Itaú BBA analysts think that major online stores such as Amazon and MercadoLibre will gain much from these new tariff changes. The manner the market has reacted to the changes in tariffs is essentially unfocused, with people feeling hopeful but also a little careful. Because Amazon brings in many items from the U.S. and MercadoLibre gets goods from China, the new situation presents a few problems but mainly chances to become larger.

Amazon is expected to grasp a large portion of the market, particularly because it imports many items from the U.S. into Mexico.

– Amazon’s Advantage: Approximately 30% of Amazon’s sales in Mexico are shipped from the U.S., positioning it well to capitalize on tariff exemptions and reduced competition from Asian contenders.

– MercadoLibre’s Strategy: Despite facing potential obstacles due to its 15% reliance on imports from China, MercadoLibre is expected to benefit from a net-positive effect due to decreased competition from Asian retailers.

Overall, while these tariffs reshape the competitive environment, both Amazon and MercadoLibre are set to enhance their market presence in Mexico. The initiatives represent Mexico’s strategic attempt to prioritize local and regional economic interests, potentially fostering innovation and growth within its domestic market.

Conclusion

In conclusion, the new import tariffs in Mexico are set to reshape the e-commerce landscape in the region. With a 19% tax on imports from countries like China and exemptions for certain goods from the U.S. and Canada, Amazon and MercadoLibre find themselves in a favorable position. This strategic policy, aimed primarily at non-trade agreement countries, reduces competition from Asian retailers like Shein and Temu.

– Amazon: Set to benefit the most, as it imports approximately 30% of its goods for the Mexican market from the U.S., allowing it to bypass some of the harsher tariffs.

– MercadoLibre: Although 15% of its imports come from China, the reduced competition creates an overall positive effect, as the company can now focus on further strengthening its presence in Mexico.

As the giants of e-commerce continue to expand and adapt to these changes, the Mexican market appears poised for intriguing developments. Ultimately, these tariffs could spark significant growth for Amazon and MercadoLibre, ensuring their increasing dominance in the Latin American online retail sector.