Amazon, MercadoLibre to profit from Mexico import tariffs, Itau BBA says

SAO PAULO/MEXICO CITY (Reuters) – E-commerce giants Amazon.com (NASDAQ:AMZN) and MercadoLibre (NASDAQ:MELI) stand to profit from new tariffs on low-cost imports into Mexico over Asian retailers like Shein and Temu, in response to analysts at Itau BBA.

Mexico this month imposed a 19% tax on imports through courier providers from nations with which it doesn’t have a free-trade settlement, which incorporates China.

Imports from the U.S. and Canada, a part of a regional commerce settlement with Mexico, will likely be exempt on purchases price below $50. Objects price between $50 and $117 coming from the U.S. and Canada will face a 17% responsibility.

“The coverage appears primarily focused at Asian gamers like Shein and Temu, which beforehand benefited from exemptions on imports under $50,” analysts at Itau BBA wrote in a word despatched to media on Tuesday.

The measures come amid heightened commerce tensions with the U.S. President-elect Donald Trump, who campaigned on a promise to impose stiff tariffs, together with on Mexico and Canada, doubled down on the risk on Tuesday, promising “very critical” tariffs on the 2 nations. 

Trump has beforehand accused Mexico of being a backdoor for Chinese language items, which Mexico has denied. Nonetheless, Mexican officers not too long ago launched “Operation Clear-Up” to grab contraband items despatched into the nation from Asia.

Amazon stands to realize probably the most from the modifications, in response to the Itau BBA workforce, adopted by MercadoLibre.

Round 30% of products offered by Amazon in Mexico are shipped in, principally from the U.S., in response to Itau BBA.

MercadoLibre brings in some 15% of its items offered in Mexico from overseas, largely from China, Itau BBA stated. 

Whereas the tariffs will impression MercadoLibre’s items sourced from China, “the general impact ought to be web optimistic” on the diminished competitors, the analysts wrote.

Mexico final month introduced a 15% tariff on imports of uncooked textiles and 35% on completed fabric-based merchandise like clothes, curtains and blankets.

“Some firms used loopholes to import completed merchandise, primarily from China, to redirect these items to the native market,” Itau BBA stated, arguing the technique had disrupted truthful competitors within the native market. 

Each MercadoLibre and Amazon ought to proceed strengthening their foothold on Mexico and are “rising quick,” Itau BBA stated.