Spurred by Relaxation of Tariffs on Clothing, Youth-Oriented Stores Head South, among them H&M, Zara, and Gap, all aimed at the younger consumer (I do shop at Zara for its classic, yet updated, style)
Encouraging the retail newcomers is the relaxation of steep tariffs on imported clothing. For more than a decade, Mexico applied antidumping duties as high as 533% on Chinese-made apparel to bolster its domestic garment industry. But in December 2011, the country eliminated the last of those transitional duties on Chinese clothing, lowering that barrier to entry. Currently the top tariff is a more palatable 25%.
“Because Mexico is a huge aspirational market, the removal of import tariffs for apparel may well be the single most-important retail event in the country in the past few years,” says a report by analysts at Credit Suisse, CSGN.VX -3.34% which estimates that clothing in Mexico was previously at least 50% more expensive than clothing in the U.S.
It’s all part of Mexico’s market-friendly policy by decreasing trade barriers.