01/02/2025
Mexico Increases Tariffs on Textile and Apparel Items
Check out this week's Customs Corner to read about Mexico tariffs, a Section 301 investigation, and more.
1) Mexico Increases Tariffs on Textile and Apparel Items
Mexico has implemented significant changes to its import tariffs on textile and apparel products to protect its domestic industry from unfair competition. The issued decree states that effective December 20, 2024, the Mexican government has increased import tariffs on the following goods:
- Finished Textile and Apparel Products: Tariffs have risen to 35% for 138 Harmonized Tariff Schedule (HTS) codes that classify finished products.
- Textile Inputs: Tariffs have increased to 15% for 17 HTS codes that classify textile inputs.
These measures are set to remain in effect until April 23, 2026.
Additionally, the decree restricts the temporary importation of certain textile and apparel products under the IMMEX program, which previously allowed companies to import goods duty-free for manufacturing or assembly before re-exporting them. This change primarily targets goods classified in Chapters 61, 62, and 63, and specific subheadings of the Tariff of the Law of General Import and Export Taxes.
These actions aim to support Mexico's domestic textile industry, which has faced challenges due to an influx of low-priced imports from countries without free trade agreements with Mexico, notably China. By increasing tariffs and adjusting import programs, the Mexican government seeks to create a more equitable market environment for local manufacturers.
2) Initiation of Section 301 Investigation into China’s Policies Related to Dominance of Semiconductor Industry
The U.S. Trade Representative (USTR) has launched a Section 301 investigation into China's acts, policies, and practices targeting dominance in the semiconductor industry.
The investigation, initiated on December 23, 2024, aims to assess whether these practices are unreasonable, discriminatory, or burden U.S. commerce. Key milestones include:
- January 6, 2025: Opening of dockets for comments and hearing requests.
- February 5, 2025: Deadline for written comments.
- February 24, 2025: Deadline for hearing requests and testimony summaries.
- March 11-12, 2025: Public hearing.
- Seven days post-hearing: Submission of rebuttal comments.
China is accused of using anticompetitive and non-market strategies, such as state subsidies, forced technology transfers, and regulatory discrimination, to dominate both domestic and global semiconductor markets. This dominance is reportedly part of industrial plans like "Made in China 2025." These practices threaten U.S. competitiveness, critical supply chains, and economic security, particularly in foundational semiconductor production for industries like defense, automotive, and telecommunications.
The investigation also examines China's overconcentration of production capacity, which disrupts global markets and discourages investments by market-oriented competitors. Projections show China may control nearly half of the world’s foundational semiconductor capacity by 2029. The USTR is consulting with advisory committees and seeking discussions with China to determine whether actions under Section 301 are warranted.
Further information as well as instructions on the submission of public comments and hearing participation can be found in the Federal Register.
3) FDA Final Rule on “Healthy” in Food Labels
The FDA has finalized a new rule updating the definition of the nutrient content claim “healthy” to better align with contemporary nutrition science and federal dietary guidelines, such as the Dietary Guidelines for Americans.
The Final Rule seeks to ensure that the "healthy" label reflects the most current understanding of what constitutes a nutritious diet.
- Alignment with Dietary Guidelines: The revised definition incorporates updated nutritional science and dietary recommendations to support consumers in choosing foods that contribute to a balanced diet.
- Revised Labeling Requirements: Food products labeled as "healthy" must meet updated criteria for nutrient content, including limits on added sugars, saturated fats, and sodium. These criteria aim to ensure that foods labeled as "healthy" truly support overall health.
- Focus on Nutritional Quality: The changes prioritize foods that serve as foundational components of a nutritious diet, such as fruits, vegetables, whole grains, lean proteins, and healthy fats.
- Consumer Guidance: By redefining "healthy," the FDA aims to help consumers make informed food choices more consistent with dietary recommendations, promoting better overall dietary practices.
This rule marks an effort by the FDA to ensure that food labeling provides clear and accurate information to guide healthier eating habits. The revised standards are intended to encourage manufacturers to reformulate products to meet the updated criteria for healthfulness.
The rule is effective February 25, 2025, and the compliance date is February 25, 2028.
4) USDA Import Inspection Fee Structure
The USDA Agricultural Marketing Service (AMS) is revising its fee structure for Section 8e import inspections of fresh fruits, vegetables, and other products.
These changes aim to ensure full cost recovery for AMS while reducing financial burdens on applicants, particularly for additional sublots. AMS finalized these rules after public consultation and a single supportive comment during the rulemaking process.
Key changes include:
- Fee Basis Transition: Switching from a per-carlot to a per-pound fee structure to better align fees with inspection costs, based on a standard carlot weight of 40,000 pounds.
- Reduced Sublot Fees: Cutting the fee for Section 8e sublots by 50%, from $116 to $58, while keeping non-Section 8e fees unchanged.
- New Calculation for Smaller Lots: Implementing a minimum fee for lots smaller than a carlot, calculated based on the greater of a per-pound rate or a 2-hour minimum charge at the established hourly rate.
The per-pound fee structure will proportionally increase costs for larger loads requiring more sampling but will reduce fees for loads subject to sublot charges. AMS will update the fee schedule annually to reflect changes in costs.
The new fee structure can be found in the Federal Register.
5) FSIS 2025 Rate Changes
The Food Safety and Inspection Service (FSIS) has announced in the Federal Register its 2025 rates for inspection and related services for meat, poultry, egg products, and imports/exports. Effective January 12, 2025, the updated fees are:
- Base time rate: $73.04 per hour.
- Overtime rate: $89.68 per hour.
- Holiday rate: $106.32 per hour.
- Laboratory services rate: $105.68 per hour.
- Export application fee: $4.83 per application, an increase of $0.82 from the previous year.
These adjustments reflect FSIS's efforts to recover costs associated with providing these services.
6) FDA Proposes Rule on Talc-Containing Cosmetics
FDA is proposing testing requirements for talc-containing cosmetics, using standardized tests to detect and identify asbestos, which may be present as a contaminant in talc. The proposed rule would require manufacturers of talc-containing cosmetics to test a representative sample of each batch or lot using both Polarized Light Microscopy and Transmission Electron Microscopy / Energy Dispersive Spectroscopy / Selected Area Electron Diffraction.
The rule would also allow manufacturers to rely on a certificate of analysis for each batch or lot from a qualified talc supplier instead of testing. Manufacturers would need to keep records demonstrating compliance with the testing rule.
Under the rule, noncompliance with both the testing and recordkeeping requirements would result in an adulterated product under the Federal Food, Drug, and Cosmetic Act. Further, FDA has determined that there is no safe amount of asbestos, and that if any asbestos is present in a talc-containing cosmetic, or in talc used in a cosmetic product, that product is adulterated.
Adulterated products cannot be introduced into or delivered for introduction into interstate commerce.
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