Shoe smuggling: The new frontline in Mexico’s trade war

It’s not just about protecting footwear but about another front in the war on drugs.

Slowly but surely, the loopholes become a tightening noose. The main problem seems to lie in a beloved tax incentive programme known as IMMEX. It was originally designed to allow parts and raw materials to enter Mexico tax-free in order for them to be “transformed” into finished goods and re-exported.

Some aren’t playing by the rules. Some are importing tariff-free goods through IMMEX only to resell them illegally in the Mexican market.

First, the Mexican government cracked down on the warehouses. These were specifically ones that line the US-Mexico border where finished products, such as apparel, would arrive to Mexico to be re-exported into the US. The “transformation” that justified their inclusion under IMMEX was the repackaging, storage, and processing of the goods which is cheaper in Mexico than in the US. But some warehouses were breaking the rules and selling those products in Mexico—so the government struck their licences.

The Mexico Political Economist covered that story in-depth earlier this year.

Smuggling has continued, particularly in the footwear industry. Mexico imported 40 million pairs of shoes in 2024, the equivalent to 20% of Mexico’s total domestic production. “And about 90% of that was contraband,” Juan Carlos Cashat, president of the Footwear Chamber of the State of Guanajuato (CICEG), Mexico’s main shoe producing region, told The Mexico Political Economist.