China Tariffs Eating Your Profits?

China Tariffs Eating Your Profits?

Since July of 2019, imported goods made in China are subject to a 25 percent tax in the United States. The purpose of this tax, along with the other China tariffs, is to increase the cost of Chinese products for American consumers and businesses. You will either have to raise your prices in order to pass the tax on to your customers or accept a cut in profit margins if you are currently manufacturing goods in China.

 

But there’s a viable solution for companies facing the China tariff crisis: Move your manufacturing to Mexico. Now that there’s a new trade agreement between Mexico, Canada, and the U.S., manufacturing goods and services between these nations is easier and cheaper than ever before:

  • There are no tariffs for products made in Mexico and imported into the United States that meet NAFTA rules of origin requirements.
  • Lower shipping time for goods to get into the United States
  • Lower average cost of shipping
  • Lower number of days to start manufacturing operations
  • Cost-effective ad more productive labor pool