Mexico’s recent tariff policies are targeting “border-skipping,” a strategy where U.S. e-commerce sellers import goods—mainly from China—through Mexico under lower duties before shipping them to the U.S. To close this loophole, Mexico has raised import duties up to 35% on apparel, textiles, and household goods, restricted temporary imports under the IMMEX program, and imposed new tariffs on non-USMCA imports.
These changes are driving up costs, complicating logistics, and forcing businesses to rethink their supply chain strategies. Matt Muenster, Chief Economist at Breakthrough, explains how these policies are reshaping freight flows, influencing spot rates, and what companies can do to stay ahead.
Supply Chain 24/7: How are Mexico’s recent tariff policies, particularly the decree targeting “border-skipping,” impacting U.S.-Mexico trade flows?
Matt Muenster: Mexico’s new decree specifically targets ‘border-skipping,’ where U.S. e-commerce sellers bring in Chinese goods, particularly apparel and textiles, through Mexico at reduced or no duty, then ship them to the U.S. to avoid higher tariffs. By raising import duties on these products and restricting them under the IMMEX program, the policy pushes companies to reexamine their supply chains, ultimately increasing costs and complicating cross-border logistics.
SC247: What challenges are U.S. companies facing when adapting to the restrictions on temporary imports under the IMMEX program?
MM: As companies adapt to these new restrictions, they will likely encounter increased costs from restricted eligibility for temporary imports and higher duties. Logistical hurdles also arise as businesses rapidly reroute or reclassify shipments, sometimes with goods already in transit. Regulatory uncertainty adds another layer of complexity, requiring transportation leaders to stay informed about newly restricted product categories and evolving compliance requirements. Additionally, evaluating alternative manufacturing, sourcing, or entry points can prolong lead times and disrupt established supply chain relationships.
SC247: Do you anticipate long-term shifts in freight strategies, such as increased reliance on domestic freight or nearshoring, as a result of these policy changes?
MM: The decree targeting cross-border trade will push U.S. businesses to reevaluate their supply chains, increasing reliance on domestic freight and regional trade within North America. This, combined with Mexico’s focus on strengthening its domestic manufacturing, suggests that nearshoring and domestic freight will play a central role in global supply chains.
SC247: What are the primary drivers behind the recent spot rate fluctuations, and how are they affecting freight strategies for companies operating across the U.S.-Mexico border?
MM: Policy changes in Mexico, the threat of tariffs, nearshoring trends, and big infrastructure projects are driving spot rate fluctuations. For example, the threat of tariffs and changes to the IMMEX program, like higher import duties and tighter rules for temporary imports, increase demand and put pressure on near-term rates.
At the same time, Mexico is pouring money into things like port expansions and new rail systems. While those upgrades will pay off eventually, they’re causing some short-term headaches with delays and bottlenecks.
Because of all this, companies are rethinking how they move goods. Many are exploring alternative modes and shipping routes or diversifying their supply chains to avoid being too dependent upon a single location or service provider.
SC247: How do you see spot rates evolving in 2025, and what factors will play the biggest role in shaping these trends?
MM: In 2025, we’ll probably see spot rates stay volatile through uncertain policy dynamics. We expect spot and contract rates will experience gradual upward price pressure as 2025 continues. Tariffs are playing a significant role in shaping these trends.
SC247: With the $3 billion Manzanillo port expansion, what changes do you foresee in freight routing and costs for goods moving between Mexico, the U.S., and other markets?
MM: With container capacity doubling and improved connections, this port will probably become a major hub for trade between Asia, Mexico, and the U.S. For goods headed to the Eastern U.S., Manzanillo could be a competitive option compared to relying on U.S. West Coast ports or the Panama Canal. In aggregate, more capacity and competition could help lower shipping rates and create more flexibility in moving products.
SC247: What advice would you give to companies that want to mitigate rising shipping costs and adapt their logistics strategies to these changes?
MM: Don’t rely too much on one route, and diversify your mode and carrier base. Use different ports and transport methods to keep your options flexible.
Keep an eye on policy updates, especially changes like the IMMEX program and tariffs, so you’re not caught off guard. Invest in logistics tools that give you better visibility and make your operations more efficient.
Matt Muenster is a Chief Economist at Breakthrough,