Also known as: Tariff elimination, Duty phase-out, Tariff staging
The gradual and programmed reduction of import tariffs established in free trade agreements, bringing duties from their original level to zero over a determined period.
A tariff phase-out is the process of gradual import duty reduction agreed between countries under a free trade agreement. Tariffs are progressively reduced according to a schedule established in the treaty, ranging from immediate (day one) to periods of 10, 15, or more years. The ultimate goal is to reach a zero tariff for most products.
Treaties classify products into staging categories: A (immediate), B (5 years), C (10 years), D (15+ years), E (excluded). Each category has a different duty reduction schedule.
Tariff phase-out is one of the central elements of any trade agreement negotiation. The most sensitive sectors (agriculture, textiles, automotive) typically have longer phase-out schedules to allow domestic industries to adapt to international competition.
Preferential Tariff Rate
A reduced or zero tariff applied to goods originating from countries with which Mexico has a free trade agreement in force, provided they meet the agreement's rules of origin.
TradeFree Trade Agreement (FTA)
International agreement that eliminates or reduces tariffs and trade barriers between signatory countries.
TradeUSMCA (T-MEC)
Trade agreement between the United States, Mexico, and Canada that replaced NAFTA in July 2020, governing trade, investment, and intellectual property rules.
TariffsAd Valorem Tariff
An import duty calculated as a percentage of the customs value of goods. It is the most common type of tariff in international trade.