Tariffs on Asian products took their toll on consumers in the first half of the year: experts

The 19% fixed tariff that Mexico has applied since January to goods imported through platforms had a one-time effect on the prices of the textile portion of toys, shoes, and clothing in the National Consumer Price Index (INPC), according to economists from Finamex, a brokerage firm, and JP Morgan.

"Within the inflationary phenomenon, within non-food goods, we are likely experiencing a phenomenon associated with these tariffs, but it is probably not the only factor contributing to this pressure," explained Víctor Gómez Ayala, chief economist at Finamex, a brokerage firm.

Mexico imposed tariffs on Asian products from China, Vietnam, and South Korea via digital platforms, and we did see some categories in the Consumer Price Index (CPI) reflecting the impact on prices, clarified Gabriel Lozano, chief economist for Mexico at JP Morgan.

This refers to the tax that popular online retailers such as Temu and Shein have been paying since January.

However, both agree that the effect has now dissipated. “The combination of factors that were present in the past two weeks has finally occurred, along with others, such as the impact of avian flu in Brazil; the increase in the price of meat products due to the substitution effect of chicken prices; the impact of weather pressures; and, on the other hand, the tariffs on Asian countries that we saw in the past two weeks,” Lozano emphasized.

According to official statistics, core inflation has maintained an upward trend since December and continued through June, rising from 3.65% to 4.51% annually.

Economist Gómez Ayala stated that the products whose prices were pressured in the first half of the year as a result of the aforementioned tariff were non-food items.

Statistics from the National Institute of Statistics and Geography (INEGI) show that non-food inflation rose from 1.33% in December to 2.98% in June, with a consistent monthly increase.

Specifically, generic items related to clothing, furniture, electronics, health and personal hygiene products, as well as personal transportation.

"When you look at the behavior of the four (clothing, furniture, electronics, health products, and personal hygiene products), it's noticeable that in the first three—clothing, furniture, and electronics—there is a recovery in the price index compared to last year, which is possibly explained by these tariffs on imported products," he explained.

But he noted that with the information we have at this time, it's difficult to know how much of that recovery is attributed to the tax on those platforms.

Second semester without that pressure

Economist Gabriel Lozano reiterated that this impact "has already passed and will not be seen very significantly in the second half of the year, so inflation should now be easing back to its target, although we believe that reaching the specific target of 3% in the third quarter of next year, as anticipated by the Bank of Mexico, will be very difficult."

Gómez Ayala said the adjustment is being made gradually over the two weeks, depending on how the inventories of importing companies are depleted or the pattern of consumers who purchase through these platforms.