Can Shelter Services in Mexico Ease Tariff Uncertainty?

Talks about tariffs are dominating industry conversations in 2025. We are undoubtedly experiencing challenging times as the U.S. administration generates uncertainty with a series of continuously changing tariffs, including:

• Section 301 tariffs against China: 25%
• IEEPA Tariffs against Mexico & Canada: 25% (USMCA-qualifying products are exempt) and China: 20%
• Section 232 tariffs on steel and aluminum products and derivatives: 25% (Exemptions may apply if steel or aluminum precursor products are melted and poured in the USA)
• Reciprocal tariffs on various countries, including 125% on China

This is in addition to the most recent tariff update on April 29th when President Trump signed an Executive Order to alleviate “stacking” of certain identified tariffs. Stacking occurs when tariffs from different programs are ‘stacked’ on top of one another.  For example, auto parts from Malaysia pay a 25% auto parts tariff plus 10% reciprocal tariff for a stacked total of 35%.

The tariffs currently affected are auto parts, Mexico IEEPA, Canada IEEPA, and Section 232 on steel and aluminum. However, the order does not mention reciprocal tariffs on countries so that those may still be “stacked.”

At IVEMSA, we’ve received an uptick in inquiries as company leaders seek guidance about manufacturing in Mexico, and we look to the expertise and experience of our longtime U.S. customs broker, Alex Romero, for answers to frequently asked questions.

Romero has been with IVEMSA since the beginning and leads a third-generation brokerage firm that’s been in operation for 43 years. He has weathered his fair share of changes in the manufacturing world, though says what’s unfolding now in terms of tariffs is unlike anything he’s ever seen.

However, to ease the uncertainty, he’s sharing important information about how manufacturers can handle these shifts during what is a fluid situation, including taking advantage of shelter services in Mexico.

Why Mexico Is a Necessary Part of the U.S. Manufacturing Solution

The Trump administration has claimed the ultimate goal of imposing tariffs is to bring manufacturing back to the U.S. However, there are economic factors at play affecting this proposed outcome.

First, the U.S. is a high-cost manufacturing country, which means inflation would spike on everything that’s made in America. The combination of tariffs has proven to be a heavy burden for affected companies and has forced them to make decisions as to where to produce their products.

Although the effect of the IEEPA tariffs against Mexico is minimal, as Mexico’s USMCA-qualifying products are currently exempt from the 25% IEEPA tariff, the exemption is at the discretion of President Trump and can change without notice.

Currently, the products most affected are those of Chinese origin, as the combined Section 301, IEEPA, and reciprocal tariffs total 175%. These tariffs apply even if imported from other countries, such as Mexico.

Second, companies won’t necessarily look to the U.S. as part of their manufacturing strategy. They’ll keep their sights set on the next low-cost alternative.

Even if more manufacturing jobs become available, there’s no assurance the U.S. workforce has the skills, qualifications, or interest in fulfilling them. Shelter services in Mexico include recruiting the employees necessary to set up and sustain production.

Third, the U.S. and Mexico, along with Canada, are part of the USMCA, a trade agreement that was initially implemented during President Trump’s first term in office. Last year, Mexico was America’s largest trading partner for the second year in a row, continuing to provide lower manufacturing costs and high-quality, on-time delivery to the U.S. market.

What Manufacturers Must Provide to Meet USMCA Requirements

Manufacturers must provide a Bill of Materials (BOM) listing unit costs and Harmonized Tariff Schedule (HTS) codes to compare to the rules of origin for marking. As part of shelter services in Mexico, IVEMSA can review a manufacturer’s BOM and let them know what qualifies.

To meet USMCA requirements, materials must have substantial transformation. For example, Romero says, if the U.S. imports raw materials into Mexico, and they are manufactured before being exported, they can qualify as a USMCA product.

In addition to the USMCA, U.S. customs brokers also look at 19 CFR Part 102 for origin qualification. Both have to be accessed when determining whether materials are going to be affected by tariffs.

What products qualify under the USMCA?

The USMCA rules are written into the HTS and are based on the tariff classification of the final product. For instance, cosmetic additions to half-finished products will not qualify for USMCA approval. The assembly and manufacturing process have to meet the rules of origin.

It’s ideal for raw materials to come from the U.S. to keep them within the trade bloc of the USMCA. However, materials can be imported from any country and exported to the U.S. if there’s a tariff shift.

Again, it’s best to work with a shelter services company like IVEMSA and a customs broker to look at your BOM and determine if it meets the rules.

Example of a qualified vs. non-qualified comparison

If a company imports cables from China and performs non-substantial assembly work in Mexico, the origin doesn’t change, and the materials are still considered for China tariffs.

On the other hand, if a manufacturing company makes diffusers and grills but starts with imported aluminum coils, there is a substantial transformation to air-conditioning ductwork. Visually, there’s an obvious change.

IVEMSA can recommend what will count as transformation after looking at the manufacturer’s BOM. Also, if tariffs change during the import process, anything after the date the change takes place will be subject to any newly imposed tariffs, while those already approved under the USMCA remain exempt.

The Advantage of Implementing Shelter Services in Mexico

Manufacturers benefit from connecting with a shelter services company like IVEMSA that works closely with U.S. customs brokers who are up-to-date with the changes to tariffs taking place.

Having this built-in knowledge and experience is valued highly, especially during these uncertain times. Though other changes are likely around the corner, having an expert shelter services partner can help ease the transition.

For questions about tariff exemptions for your BOM or to discuss the benefits manufacturing in Mexico continues to provide, contact IVEMSA today.

About the Author: Alex Romero

Alex Romero has been working at AF ROMERO CO since he joined the company in 1981. He is a Licensed Customs Broker and General Manager of AFROMERO & CO. He specializes in U.S.-Mexico trade with a focus on U.S.-IMMEX/MAQUILADORA companies. AFROMERO & CO is a family-owned/operated business.