The Imelda Marcos tax

Of all the problems the Mexican government is facing (narcotraficantes, violence, security, vigilantes, slow growth, implementation of new reforms, etc.), they apparently also have time to take on the unfair practices of foreign footwear manufacturers.

Appropriately announced at the Leather and Footwear Fair (!), “Mexican Finance Secretary Luis Videgaray said all footwear imports will be hit with a tariff equivalent to between 25 percent and 30 percent of their declared customs value.”  This is mean to counter countries that export footwear at “unjustifiably low” prices.

The government isn’t stopping there though in their fight for domestic footwear manufacturing.  They are also working on creating a new price list for foreign shoe imports: “All importers that ship footwear whose reported (declared) price at customs is lower than the estimated price must cover the duties that arise from that differential.”  For some reason, footwear imports will also only be allowed at 9 entry points (as opposed to 33 currently).

A couple of thoughts:  (1) I’d love to see the process by which the government decides on the fair value for different shoes; (2) is there really a strong domestic push for import protection of footwear in Mexico or is this some token tariff increase to show that the government “cares” about manufacturers; and (3) I’m sure these new rules won’t create new possibilities for corruption.

 

 

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