Understanding Valuation Methods for Imported Goods When Manufacturing in Mexico

Last Updated on May 1, 2025

When manufacturing in Mexico, the checklist usually starts with location, costs, and labor. And for good reason—Mexico has a fantastic labor pool, growing infrastructure, and trade benefits under the USMCA. But here's what many companies miss: valuation methods for imported goods. It might sound dry, but it's a dealbreaker if you get it wrong. One mistake here can mess with your tariffs, delay shipments, and cause a regulatory mess nobody wants to clean up.

Let's walk through why this matters—and how understanding the rules can save your company headaches.

First Things First: Why Does Valuation Matter?

You know what? Customs valuation isn't just another box to check. It’s the starting point for everything else: duties, taxes, compliance under the USMCA—everything hinges on it.

Imagine you are sending a shipment of machine parts to your Saltio factory. You declare the value too low (even accidentally), and customs officials call you out. Suddenly you’re stuck in audit land, facing fines, losing tariff benefits, and scrambling to fix paperwork. Production grinds to a halt.

And with the U.S. tweaking tariffs left and right, Mexico’s customs folks (SAT) are watching import valuations closer than ever. It's not just about money anymore—it's about staying credible.

Breaking Down the Main Valuation Methods

Alright, let's get into the real stuff. Mexican customs (just like U.S. customs) follow the World Trade Organization (WTO) valuation rules. Here’s the order you need to know:

1. Transaction Value Method (the favorite)
   The price you actually paid for the goods, assuming the buyer and seller are unrelated, and the price isn’t influenced by weird side deals.
2. Transaction Value of Identical Goods
   No invoice? Customs will find identical goods that are properly documented and base your duties on that.
3. Transaction Value of Similar Goods
   If identical items aren’t available, they’ll look at something close enough.
4. Deductive Value Method
   Customs calculates the value based on the sale price of the goods inside Mexico, with some deductions.
5. Computed Value Method
   They add up production costs, profits, and other charges to build value from scratch.
6. Fallback Method
   A mix-and-match if none of the other methods work—basically, whatever makes reasonable sense.

And here's the catch: you can't pick which method you like best. It is essential that you try them in order. If the transaction value fits, you use it. If not, you move down the list.

Real-World Example: It's Never "Just Business"

Let’s say you're relocating an assembly operation from Ohio to Matamoros. You’re shipping custom-designed parts to Mexico for assembly. These parts don't have an identical product on the market, and you negotiated a sweetheart deal with your sister company back in the U.S.

Here’s the thing—Mexican customs might not accept your low transaction value because you’re “related parties.” If that's the case, you'll probably have to switch valuation methods and back it up with real documentation—transfer pricing studies, independent market quotes, that sort of thing.

Otherwise? Expect delays and penalty fees.

One of the primary implications of incorrect customs valuation is financial penalties. If the customs authorities identify that an importer or exporter has declared an incorrect customs value, they can impose significant fines and penalties. The amount of the penalty can vary depending on the severity and frequency of the infringement. Therefore, it is important for businesses to ensure that they declare the correct customs value to avoid financial penalties.

HMRC regularly release information about companies that have breached customs valuation and the level of penalties issued - as much as it is a "name and shame", it also serves to deter companies from making the same mistakes. - LinkedIn

How It Ties Into USMCA Compliance

The USMCA isn’t just a handshake agreement. It’s a serious, rules-based framework. One wrong move in valuation, and you might lose duty-free treatment for your goods.

Under USMCA, you need to prove:

• Your goods meet the rules of origin.
• The declared value makes sense based on real transactions.
• You keep appropriate paperwork (think invoices, shipping documents, certificates of origin).

Mess that up, and you could end up owing back duties, facing audits, or even getting blocked from claiming tariff benefits for a year—or more.

Tariff Trends You Can’t Ignore

You might’ve noticed -- U.S. tariffs are getting trickier every year. Steel, electronics, and textiles-tariff walls pop up like mushrooms after a rainstorm. And that makes the correct valuation even more critical.

Mexico is trying to stay competitive. But they’re not turning a blind eye either. Customs officers are getting sharper, asking demanding questions, and demanding airtight documentation.

It’s not about making life difficult—it’s about trade fairness. And honestly, if you’re legit, you’ve got nothing to worry about... as long as your paperwork is clean.

Conclusion: Get It Right, Stay Ahead

Manufacturing in Mexico offers a ton of advantages—especially when you think about highly skilled labor, cost efficiencies, and strategic locations. But none of it matters if you mess up valuation methods for imported goods.

Doing it right means lower tariffs, smoother customs clearances, and keeping your USMCA benefits safe and sound. It’s one of those "small hinges that swing big doors" things.

So before you hit "send" on your next shipment, ask yourself: is my valuation airtight? If you’re even unsure, it’s worth getting a second opinion. Your future operations in Mexico might depend on it.

FAQs on Valuation Methods for Imported Goods When Manufacturing in Mexico

What is the primary valuation method for imported goods in Mexico?
The primary method is the Transaction Value Method—basically, the price you actually paid for the goods, adjusted if necessary.

Why does related-party status matter in customs valuation?
If you're buying from a related company, customs might question whether the price reflects true market value. It triggers extra scrutiny.

How can improper valuation affect USMCA benefits?
Incorrect valuation can disqualify your goods from duty-free treatment, lead to fines, and force you to pay backdated duties.

Is there flexibility in choosing a valuation method?
No. You must follow the order prescribed by Mexican law—starting with Transaction Value and moving down if necessary.

What happens if I don't have proper documentation for my imported goods?
Without strong documentation, customs can reject your valuation, reassess your goods, impose penalties, or delay your shipment.