How to Import Goods to the U.S. via Mexico

Table of Contents:

• USMCA & Importing Goods to the U.S. via Mexico
• USMCA Benefits to Cross-Border Traders
• Importing from Mexico to the US: Industries Affected by USMCA
• Next Step to Importing Goods to the U.S. from Mexico
• Bill of Lading
• Commercial Invoice
• Freight Invoice
• Cargo Manifest
• Letter of Instructions
• Material Safety Data Sheet
• Certificate of Origin
• Packing Slip
• Shippers Export Declaration
• De Minimis
• U.S. Parcel Imports via Mexico

Mexico is one of the United States’ largest trading partners. Imports into the U.S. from Mexico include billions of dollars’ worth of medical instruments, automotive, consumer goods, machinery, electronics and tech equipment, including computers and computer parts, semiconductors and software, and other goods. The rapid growth of global ecommerce in the past few years contributed to a massive increase of goods entering the U.S. Increased shipment, tougher competition and new consumer expectations require companies to operate in complex supply chains and find ways to optimize their cross-border shipment. Shipping products to the U.S. via Mexico is a great alternative to traditional parcel clearance. Importers can benefit from lower fulfillment costs and duty fees while getting the same processing time as traditional fulfilment. Business owners can easily ship products to anywhere in the U.S. at a lower cost thanks to lower warehousing and labor costs in Mexico. Read on to learn more about how to import goods to the U.S. via Mexico.

USMCA & Importing Goods to the U.S. via Mexico

Importing activities in Mexico and the U.S. are affected by the USMCA. The U.S., Mexico and Canada have a trade deal called the USMCA or U.S.–Mexico–Canada Agreement. The USMCA went into effect on July 1, 2020 and replaced the old North American Free Trade Agreement (NAFTA). The USMCA (also called NAFTA 2.0) is a modernization of NAFTA, with new regulations on standards harmonization, digital trade, labor and environment, and macroeconomic policy.

USMCA Benefits to Cross-Border Traders

For traders in ecommerce and those who are thinking about entering the market, there are many benefits to consider. The USMCA facilitates trade. An online database of customs information that include taxes, regulations, duties, and tariffs is available to the trading community. This helps improve understanding and cut through red tape. Aside from that, U.S. Customs and Border Protection (CBP) has developed new digital tools to improve data sharing, analysis, site visits, and investigations.  Reduces customs paperwork. Cross-border trade generally require a lot of cargo information from exporters, importers, customs brokers, and other trade participants. The increased de minimis value now makes it possible for more shipments to be exempt from lengthy documentation requirements. Importers and carriers can increase the daily volume of parcels that they handle knowing that it will clear customs quickly. Lowers costs. Reduced paperwork not only saves time but also money. It allows shippers to benefit from reduced administrative costs and customs fees. Fewer data requirements and higher de minimis thresholds makes it easier and cheaper for SMEs to enter the North American ecommerce market. Trade participants transporting low-value shipments also benefit from reduced costs and faster customs processing. Improves the digital ecosystem. The USMCA has provisions to prevent the passing of laws that restrict the flow of cross-border data and limit data localization requirements. These provisions help improve access to information, visibility and collaboration among trade participants.

Importing from Mexico to the US: Industries Affected by USMCA

The trade agreement has a major impact on the following industries:

• Automotive industry
• Textile and apparel
• Goods manufacturing
• Agricultural manufacturing

For agricultural goods, the USMCA retained the zero-tariff treatment under NAFTA but adjusted tariff rate quotas. For the automotive industry, there are new rules of origin criteria for automotive and automotive part imports, including new steel and aluminum import requirements, new labor value content and higher regional value content. Business owners should look closely into these requirements to ensure compliance. Duties on digital products like videos, e-books, games software, and music are prohibited. USMCA also prevents unnecessary restrictions on imported remanufactured goods. If one party maintains a prohibition/restriction on a used good, it must not apply this rule to a remanufactured good. The trade agreement has provisions to fight transshipments of goods that infringe intellectual property rights, illegal procurement of wild fauna and flora (including timber), importing goods sourced from forced labor and evasion of countervailing/ antidumping duties.

Next Step to Importing Goods to the U.S. from Mexico

After operational restrictions and applicable regulations, the next important step is learning about the paperwork required for a Mexico-US shipment. Here are some of the important documents: Bill of Lading The bill of lading provides evidence that the shippers and forwarders are authorized to move goods, title of the shipment contents to a specified party, details of the goods being shipped, and important instructions to the forwarders and shippers. Commercial Invoice A commercial invoice contains:

• statement showing where the purchase was made
• country of origin information
• description of item or items being shipped
• names and addresses of buyers and sellers
• statement of value
• number of item or items being shipped

Freight Invoice The freight invoice shows the cost of freight and cost of transportation. Cargo Manifest The Cargo Manifest is used to file commercial entries into the U.S. It’s a document created for each shipment and carries an entry number. It can be printed and provided to the driver who is bringing the goods from the Mexican side of the border into the U.S. This is the same document that the driver presents at the commercial port of entry to clear U.S. customs and move the goods into the U.S.   Letter of Instructions Called “La Carta de Instrucciones” in Spanish, the Letter of Instructions is an important document used in international trade between Mexico and the U.S. It typically has contact details of the parties to the transaction and information for the freight forwarder, carrier and broker. Material Safety Data Sheet A Material Safety Data Sheet (MSDS) is required for any shipment of hazardous materials Certificate of Origin Most documents to customs are used to ensure that if the shipment is qualified for preferential duty and tariff treatment under the provisions of the USMCA. The Certificate of Origin is proof that the products or goods originate in one of the three signatory countries to the USMCA (the U.S., Mexico and Canada.) Packing Slip Packing slips are used for verifying the contents of the packages sent from the shipper to the receiver. Shippers Export Declaration If you are shipping goods that are valued in excess of US$2,500.00 you should file a Shippers Export Declaration (SED.) The SED can be filed via hardcopy or electronically.

De Minimis

To facilitate cross-border trade, Mexico, Canada and the United States agreed to raise de minimis shipment value levels. Under the USMCA, all shipments under or equal to the de minimis value have minimal entry and other customs documentation requirements. This helps encourage businesses, particularly small and medium enterprises, to participate in the global ecommerce market. For example, informal entries such as low-value or Section 321 shipments allow for express shipments to enter the U.S. with reduced paperwork. Majority of ecommerce parcels enter the U.S. as Section 321, a type of release option that helps speed up cargo clearance for shipments valued at $800 or less. A higher de minimis threshold provides many benefits to online sellers, importers and U.S. consumers. There’s less paperwork and sellers can import more products and clear them faster without increasing costs. Since there are no taxes or duties, sellers can price their products lower and attract more customers.

U.S. Parcel Imports via Mexico

Importing goods to the U.S. via Mexico provides business owners a great alternative to traditional parcel clearance. They can leverage lower duty fees, fulfillment costs, Mexico’s lower warehousing and labor costs and still get the same processing time as traditional fulfilment. To learn more about how to import goods to the U.S. via Mexico contact us today!