Liverpool is already feeling the effects of rising tariffs on Chinese textiles.

The Port of Liverpool, the department store chain in Mexico, reported that its import costs increased due to the tariff increase Mexico imposed on textile products from China last December.

"In terms of costs, textiles arriving from China to Mexico already suffered a tariff increase in December. Therefore, we are already seeing the full effect of that tariff increase," explained the company's Finance Director, Gonzalo Gallegos, who did not provide further details.

In the conglomerate's virtual conference with stock market analysts, company executives explained that gross profit margin fell nearly 180 basis points in the first quarter of this year compared to last year, due to promotions to boost sales and reduce inventories, higher tariffs and import costs, and increased logistics expenses, among other factors.

The department store chain's finance director also stated that, for now, they do not anticipate imposing additional tariff measures on products from Asian countries.

On December 19, 2024, the Mexican government imposed a tariff of up to 35% on textile products imported from nations with which it does not have free trade agreements, with the aim of protecting the national industry.

Although the measure is not targeted at any specific country, China, which accounts for more than a third of Mexico's textile imports, is believed to be one of the most affected countries.

Regarding the tariffs the United States government has imposed on multiple products imported from Mexico, Liverpool's CFO stated that, for now, they don't see any major impact on their supply chain.

"Since we have very few imports directly from the United States, we see a very low risk of supply chain issues, in general, due to tariffs," he said.

He added that the Mexican government has been very cautious in reacting to U.S. tariff policies, and they are waiting to hear about the overall tariff increase Mexico might implement.

"For the time being, in addition to being cautious with the supply chain and trying to control the overall increase in the cost of imports from Chinese products, we will have to wait and see what the overall tariff increase from Mexico will be," explained Gonzalo Gallegos.

The company remains vigilant about potential decisions by the Mexican government regarding the imposition of tariffs on automobile imports from China, as this could directly impact the operations of BYD, a Chinese electric vehicle manufacturer that has a commercial alliance with Liverpool.

"We are satisfied with the business performance and are waiting to see what happens if the Mexican government imposes tariffs on Chinese automobile imports. So far, that hasn't happened. We are monitoring the situation very closely," added Gonzalo Gallegos.