What You Need to Know About Importing Goods From Mexico

flag of America and Mexico with postal packages logistic center 3d-illustration

flag of America and Mexico with postal packages logistic center 3d-illustration

Mexico is one of the United States’ biggest trading partners. Every day, there are about $1.7 billion in products and services crossing the U.S.-Mexico border. The relationship between the two nations cannot be emphasized enough, and it’s why trading agreements such as NAFTA and the most-recently-negotiated USMCA (United States Mexico Canada Agreement) made top news and ruffled political feathers when it was threatened. As these trade agreements were negotiated, the importance of the Mexican market was once again highlighted here at home. 

The importing process, of course, is another matter altogether, and one that requires a hefty amount of paperwork, understanding of laws and regulations, and customs clearance processes. 

Here’s what you need to know about importing goods from Mexico. 

If you’re looking for a customs broker in El Paso to help you import goods from Mexico, the Cordova Brokerage team is there to help. Headquartered in El Paso, Texas, we know the border regulations inside and out!

Importing Goods from Mexico 

Mexico is the second-largest supplier of goods for the United States. According to the most recent data, Mexico’s trade accounted for about 671.1 billion in 2018, which tallied up to more than the total trade with our northern neighbor Canada. The biggest categories of goods coming in through our Southern border include:

  • Vehicles
  • Electrical machinery 
  • Agricultural products
  • Mineral fuels
  • Optical and medical equipment 

What You Need to Consider When Importing Goods 

When talking about international trade—imports or exports—companies and businesses should note that every country is different. A lot of factors play when looking at important goods in the United States, all of which should be understood to avoid setbacks or loss of revenue. 

Factors to consider are:

  • Regulations of what you can and cannot import into the United States 
  • Tariffs on goods and where you import them from 
  • The time and the cost of transportation 
  • Other regulatory hoops 

Key Facts About Importing Goods from Mexico 

Many importers like working with Mexico as a country of origin for their goods because of the friendly relations and trade agreements between the two nations. Some of the benefits of importing from Mexico include:

  • Reduced or waived import duties. Consider import duties as an additional tax that a company must pay to customs authorities as a rate in addition to any goods coming in from other countries. Authorities calculate this duty with a percentage of the total value of the goods or the weight of the goods. Imports from Mexico, by contrast, do not have import duties.  
  • Faster turnarounds. The proximity of Mexico to the United States reduces the turnaround time. Overseas imports, for example, have to account for a long transportation time from the moment the order is put in when it arrives in U.S. ports. The reduction in transport time can translate to more efficient orders and a major benefit to those working under fast fulfillment timelines, dealing with supply chain issues, etc.  
  • Expedited communication. When working with international partners and companies, communication is key to ensuring the smooth flow of goods and payments. Because of Mexico’s geographical proximity, the time zones are very much lined up. The fact that Mexico and the United States share time zones make communication back and forth easier and more reliable.  
  • Decreased transportation costs. The geographical location of Mexico just south of the border also reduces the physical distance that goods need to travel. By having imported goods travel a shorter distance, costs associated with transportation are significantly reduced.  
  • Stable national relations. Mexico and the United States have amicable and working political and social relations, as well as trade relations. When countries have volatile relations, it can make the market less stable and subject to new tariffs, taxes, or stringent regulations. 

Other Things to Note

Despite the stable relations between the two countries, there is still a long list of rules and government regulations that companies must follow when importing goods from Mexico. For example:

  • The most commonly used import document from Mexico is the Customs Declaration Form for customs clearance. Mexico requires this completed document to be accompanied by a commercial invoice, a bill of lading, payment documentation, and more. 
  • All Mexican importers are required to register with the Official Register of importers. 
  • If you are exporting to Mexico, it’s worthy to note that Mexican customs regulations are strict and require absolute compliance. 
  • Products that qualify under the USMCA agreement will typically require a set of nine data elements in order to pass through as USMCA authorized products. 

Thinking of Importing Goods from Mexico, Find a Trusted Customs Broker to Guide You 

The job of a customs broker is to help clients move through the customs process effectively and in full compliance. Whether you are importing from Mexico or another country, the rules and regulations might differ, and understanding of paperwork and required documentation your goods can arrive on time and without added fees or penalties. 

Want to learn more about how to effectively import goods from Mexico? Contact Cordova Brokerage for expert guidance and advice. 

Supply Chain Vulnerabilities and Changes on the Horizon— A Customs Broker’s Perspective

Aerial view of container cargo ship in sea.

Hundreds of cargo ships hover out at sea, waiting, floating quietly, unable to port. Thousands of goods sat there, far from their destination. These scenes were real, and they caused a stir in the markets. The images took hold of the news cycle in the Fall of 2021 and began circulating concerns about supply chain chaos in our midst. Those working in the import and export business might have had a preview of some of this as various conditions began causing backlogs, labor shortages, and other problems. 

So what’s all this about? What does this have to do with exporters and importers of goods? 

Here’s what we know. 

The Tangled & Fractured Supply Chain, The View From Here

It’s no secret that covid struck a blow to what seemed to be a relatively robust economy and normal-flowing supply chains. The virus wasn’t just the normal jab to the chin, it went for the liver shot too, bruising the supply lines from different directions. Supply chains are fragile, intricate, and very much depend on the labor of people involved in every aspect of production and trade. 

If you mess with one part of the chain, the ripple effects are felt throughout. 

When the pandemic hit, supply chains were the first major indication to U.S. consumers that this virus was not just another over-blown scare tactic by the nightly news. Americans began to see the shelves of the supermarkets a little emptier than usual and then, a lot emptier, and all of a sudden hand sanitizer vanished from the face of the earth. 

For people in the import and export business, the incoming chaos was detectable on the horizon as early as January and February of 2020. It was then that the virus had started to spread in China and slowly trickled into the production of many essential goods manufactured there. 

In late 2021, people are still referring to the mysterious supply chain shortages in day-to-day conversations. The average American encounters these effects in a myriad of ways, such as short-staffed restaurants, longer-than-usual wait times when it comes to purchasing tech products, making vehicles, car rentals, home construction, and even DIY home projects, as well as access to skilled laborers and workers.

Some have narrowed down the shortages to a couple of major pain points:

  • Computer chip (semiconductor) shortages
  • Port congestions
  • Labor shortages at the ports
  • A shortage of truck drivers to drive goods cross country 
  • Skilled labor shortages across all sectors 
  • Backed up supply in manufacturing plants 
  • Heightened consumer demand after a year at home

 Stuck at Sea — Cargo Ships Floating of the Coast of America’s Port

The Port of Los Angeles is often known as “America’s Port.” That’s because it is the biggest and busiest port in the country— founded in 1907 and active ever since. This large port extends across 7,500 acres of land and water along the coast. It is through this port that thousands of goods enter the country and make their way into supermarkets, stores, and shelves. The port handles over half of U.S. imports, and yet, 65 cargo ships were stuck on the water in September 2021 waiting to dock.

What does this all mean?

On the ground, it appeared to be one continuous blame game. Some blame the dockworkers for not unloading fast enough, others blame a shortage of truck drivers for not clearing out the docks, and still, others blame more internal workings of the supply chains, varying covid-19 protocols across countries, increased restrictions, lack of supply, etc. In the end, some may argue that it begins with policy—that it has really been one domino after another that has acted upon the many layers of the supply chain.

So What Do Supply Chain Shortages Mean For Me?

Well, it depends. As of this writing, the supply chain shortage has manifested itself differently for everybody. For some people it means waiting on that home renovation project, for others it means holding off on buying that new car, and still for others it means being unable to find workers to staff their restaurant. 

For the nation at large, it means there is likely a link to a labor shortage, which means that everyone will see some effect of this in their lives, in some form or another. 

What Does All This Mean For Importers? 

As a brokerage company, we work with many clients that import or export goods. Amidst the dizzying changes and all the rest, importers and exporters are having to adjust and improvise. 

Some people argue that an over-reliance on imports meant that the U.S. was dependent on foreign goods. That dependence has been partially responsible for the situations we face today, and that it also poses a risk to the supply chains, which become vulnerable to outside conditions. For example, most of the semiconductors are produced in Asia and any backlog of production there will impact various sectors in the United States— from car manufacturers to the production of home appliances. 

The Guardians at the Supply Chain Gates

As brokers, we man the gates at the supply chains. That is, we do security, act as the liaison between importers and exporters and the Customs Border Protection Agency, which oversees the incoming cargo and products from overseas, as well as the outgoing goods. Brokers have no real control over the markets or the breakdown of the supply chains—we stand guard and make sure compliance is met by anybody taking goods out of the country or bringing them in. 

Are You an Exporter or Importer of Goods to the United States? Learn More at Cordova. 

Cordova Brokerage works with people on the ground ensuring accuracy and compliance. Whether the markets ebb and flow, as they do, goods continue to move in and out of our border and we are here to safeguard that process and complete the process accurately.

Trade Deficits and Why They Matter: What Importers and Exporters Should Know

Global business logistics import export background and container cargo freight ship transport concept

Whether you are an exporter, importer, or work in the financial sector, the word trade deficit comes up enough to garner attention. During the Trump administration, this was a central talking point, and it certainly stirred debate from both sides. People that never concerned themselves with the trade gap suddenly found themselves arguing about it. As customs brokers, we operate in the international trade sphere day-in and day-out, this number is relevant to what we do and the importers and exporters we deal with.  So what exactly is a trade deficit and how does it impact the everyday back and forth of international trade?

The international market is interconnected, and the downfalls of one country will inevitably affect another. 

What do We Mean By a Trade Deficit? 

Whenever a nation has an import surplus— meaning they import more than they export—a trade deficit emerges. The Council on Foreign Relations, for example, cites the following number: in 2018, the U.S. exported  $2.500 trillion in goods and services while it imported $3.121 trillion. This means that there was a trade deficit of $621 billion.  

As part of managing the overall U.S. economy, the idea is to try and find a balance between these numbers. The trade balance makes up the nation’s economic relationship with other countries, known as the balance of payments. 

What is the balance of payments? 

This balance of payments, as defined by the Council of Foreign Relations, is that it “consists of the trade balance, or current amount, and the financial accounts or the measures of U.S. purchase and sales of foreign assets.”

So a trade deficit is mostly caused by an imbalance between the rate of investment and the rate of savings of any given country. To reduce the U.S. deficit will in turn mean that Americans should save more or invest less and smaller trade deficits might benefit smaller U.S. exporters that compete with importers. At the same time, however, smaller trade deficits might work against regular Americans as they have less choice for consumption domestically and fewer opportunities for investment that fuel further domestic growth. 

What Influences the Size of the Trade Deficit? 

Gary Clyde Hufbauer and Zhiyao Lu of the Peterson Institute for International Economics pointed out that the trade deficit is impacted by several working forces: 

  • Government spending: When the government is throwing cash around and increasing its spending, it decreases the national savings rate and raises the deficit. 
  • Dollar rate exchange: When the dollar is stronger, the American consumer can buy foreign products more easily.  
  • The growth of the U.S. economy: A growing U.S. economy means that consumers have more disposable income to pursue buying goods from abroad. 

The Trade Deficit Trends

Because the trade deficit numbers are always a balancing act, there is a constant pendulum shift in the numbers. Changing administrations and federal policies will also have a considerable impact on these numbers, so here’s what the last few years look like:

Trade deficit:

  • In 2017, $568 billion 
  • In 2018, $621 billion
  • In 2019, $616.8 billion
  • In 2020, $678.7 billion

Trade Deficit Number of 2021

In August of 2021, Bloomberg News published a report about the U.S. trade deficit and how it had widened to a record $75.7 billion for the month. The number—which indicates the trade gap between goods and services— grew to 6.7% to $75.7 billion. The report seems to indicate that there is a steady surge in consumer demand.

Why Does the Trade Deficit Matter?

Well, it depends on your industry. If you are in the import or export business, the trade deficit will tell you something about the state of the economy and what way the pendulum is swinging. The trade deficit also indicates how the U.S. is doing in terms of some of its largest imports and exports. In 2020, for example, the U.S. imported about $116.4 billion of petroleum, the lowest amount since 2002. 

How the trade deficit affects the U.S. economy is argued about by economists and industry specialists. Some argue that an increased deficit for a prolonged period means that the country is operating with debt and it makes the economy unstable. Other effects of a continuing large deficit mean that U.S. companies may not be producing that many goods and the nation become overly dependent on others for these goods. When that happens for long enough, the U.S. industries lose their competitive edge to foreign companies and slowly discourage domestic jobs. 

Connect with a Customs Brokerage That Keeps You on Top of Things 

As a customs broker, Cordova stays on top of all relevant international trade news. Whether it has to do with imports, exports, rising prices, worldwide pandemics, we got you covered. Part of our jobs is to keep our clients in compliance with ever-changing U.S. trade regulations, tariffs, and more. 

Ready to keep your international business in compliance with a professional brokerage company? Call Cordova today and learn more. 

The Many Roles of a Customs Brokerage: Importing, Paperwork, & Clearance

A businessman selecting a Customs Concept button on a clear screen.

A customs broker is a type of middleman. They are facilitators. Experts on laws and regulations that are ever-changing and shifting. A customs broker represents the interests of the United States as it relates to the importation and exportation of goods across international waters and borders. Here at Cordova Customs Brokers, we thought we’d take a moment to explain the day in the life of a customs broker, what we do, what we’re responsible for, and why it’s important to go with the one you trust. 

To put it simply, a customs broker works with importers and exporters of goods. Everything that comes in through this country’s borders must be documented and follow what we call compliance. We get shipments cleared through customs and other agencies that might need to get involved with shipments. There are thousands of shipments that come in each day, as the relative size of imports has grown from 10% of GDP in the early 1990s to 15% in 2017. 

Why Do Importers Need a Customs Broker?

Bringing goods into the United States, or any other country might seem simple on its face. In reality, each country has its own set of rules and regulations when it comes to bringing in goods from other countries. As it is stated by Customs, “When a normal ‘entry of merchandise’ is made under the provisions of 19 U.S.C the required information and documentation is required to be filled or electronically transmitted by the “importer of record.”

As customs brokers, we work for the ‘importer of record.’ They are our clients and we represent their interests in successfully getting their goods into the United States in order to do business. The United States has regulations as well and it can make importing goods a little more complicated. A customs broker navigates the complicated process for you, getting through the paperwork, compliance, and dealing with various agencies on your behalf. 

These shipments include everything from crabmeat to squeaky toys for dogs, children’s toys, shrimp, and more. 

The process of customs brokerage existed as early as the 1850s when an importer or consignee endorsed the bill of lading over to a tradesman. These tradesmen were called ‘customhouse brokers.’ In the beginning, these brokers would sign the merchandise with their name instead of the original consignee but it led to many problems. This issue was resolved with the Customs Regulations of 1857 and the beginning of what were to be many new changes to the way we do imports. 

What is the Process of Importation like? 

It depends on whether shipments are coming through by air, water, or land. As a general overview, however, the process is relatively similar. When we work with an importer, we get the information we need and input it into specialized software that will sort through the information and send it to Customs and Border Protection. So, for example, if there is a shipment coming in, we do the paperwork and preliminary clearance before they get to the designated terminal. If the product needs to be approved by another agency like the FDA, this needs to be done as well. When the shipment comes in, it will be cleared in their computer system and the goods will be good to enter and be released to whoever is going to pick them up from there. 

Today, it is all done electrically. Technology has certainly given our job a major advantage and speeded up the process of importation in the last couple of decades. 

On any given day, a customs broker that works with importers will see any number of different types of goods. Shipments will come in carrying food like shrimp, crabmeat, and other delicacies, toys from cheap toys to more commercially popular ones, clothes, and more. Many shipments come in from China, as one of our biggest importers. One interesting tidbit here is that shrimp is actually a big import. Thousands of people in the United States consume a lot of shrimp each day. 

What is the advantage of working with a customs broker? 

As we mentioned earlier, we act as a kind of middleman that facilitates the process between various entities and agencies. Most importers are business people who want to keep to the business they are in and are not interested in being backlogged with a bunch of paperwork and confusing regulations. This is where we come in. We take care of all the legal stuff so their shipments will have no problems at the border, so they will be cleared, and ready to continue with the business of making money. 

We take care of:

  • Clearing goods through customs 
  • Making sure those goods reach their destinations
  • Calculate duty or tariff payments owed
  • Compile and fill out necessary documentation like invoices, certificates, and cargo-control documents
  • Keep on top of changes in export or import laws and regulations

Are You an Importer Looking to Bring Goods Into the U.S? Call a Trusted Customs Broker

Here at Cordova Customs Brokerage, we have been helping importers do business in the United States for many years. Our brokers are always up to speed with new regulations and changes—as they happen often—and abreast of all necessary compliance guidelines. Call us today for more information.