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What’s New This Week

Good morning, this week, the U.S. slams the door on a decades-old tariff loophole, igniting price hikes and supply chain chaos, while federal agents trace illegal guns from Georgia to Mexico’s criminal networks—raising urgent questions about America’s role in cross-border violence. As we commemorate Cinco de Mayo, we look past the parties to reflect on shared sacrifice and forgotten history.

From policy shifts to cultural truths, this edition breaks down what’s really shaping the future of North America.

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Trade Winds

The $800 Shift: Why Ending a Tariff Loophole Could Break the System

A quiet but powerful shift just took place in U.S. trade policy — and most Americans haven’t noticed yet. As of May 1st, the United States ended a longstanding tariff exemption known as the de minimis provision for shipments from China and Hong Kong. This policy had allowed packages valued under $800 to enter the country duty-free. That era is now over.

For years, fast-growing platforms like Shein and Temu thrived by exploiting this loophole — shipping ultra-low-cost goods directly to American consumers without triggering tariffs, inspections, or delays. In FY2024 alone, over 1.36 billion packages entered the U.S. using the de minimis exemption. Now, each of those shipments will be subject to full customs enforcement — and in some cases, duties as high as 145%.

It’s a move that’s politically popular, economically consequential, and administratively overwhelming.

A Win on Paper — But at What Cost?

The decision is being celebrated by some as a win for American manufacturers and retailers, who have long argued that Chinese sellers were using de minimis to undercut prices and dodge regulations. Ending the exemption closes that loophole. But the real question is: are we prepared for the aftermath?

When I served as Chief of Staff at U.S. Customs and Border Protection, I saw firsthand how even modest shifts in trade policy could ripple across our ports of entry. This change? It’s more like a tidal wave. Without dramatic reinvestment in customs personnel, infrastructure, and digital tracking systems, we’re likely to see massive slowdowns, mislabeling risks, and bottlenecks across the supply chain.

CBP will now be expected to screen, classify, and assess duties on millions of new low-value packages every single day. That’s not just an operational burden — it’s a strategic vulnerability.

Consumers Will Feel It First

Temu has already announced it will stop shipping goods from China altogether and rely solely on its U.S.-based warehouses. Others may follow. But for American families accustomed to $5 gadgets and $10 dresses delivered in days, price hikes are coming — and so are delays.

This change disproportionately affects working families, students, and small business owners who’ve relied on affordable imports to stretch their budgets or run e-commerce stores. Ironically, the very people the policy aims to protect might also be hit hardest by its implementation.

A Case for North American Resilience

Yet there’s an opportunity buried in this moment. As Chinese retailers and logistics firms reconfigure their models, many may look to North America for warehousing, fulfillment, and light assembly. Mexico, with its proximity, trade ties, and growing logistics capabilities, could stand to benefit — if we’re ready.

At Intermestic Partners, we’re helping clients reimagine supply chains that are not only closer to consumers but more transparent, accountable, and secure. The closure of de minimis may be painful, but it forces a broader reckoning: if we want a fairer, safer, and more resilient trade system, we have to invest in it.

That means investing in modern customs technology. It means workforce training at our ports. It means coordinated binational infrastructure — like what we’re developing through the SouthBridge Nogales project. And it means finally aligning our trade enforcement with our economic and national security priorities.

What Comes Next?

The paper cut may seem small — a quiet end to a tariff loophole — but the bleeding has already begun. The question now is whether policymakers will treat this as a wake-up call or just another headline.

We have a choice. We can let outdated systems buckle under new pressure, or we can turn this moment into a pivot — toward a stronger, smarter, North American trade future.

Power Move

Security, Trade, and Guns: Why the Real Risk to Investment Isn’t Just Cartels

This week, federal agents seized dozens of firearms in Georgia, part of an illegal gun-running network supplying weapons to criminal groups in Mexico. It’s a story we’ve heard before — but one we still don’t talk about enough.

As we build stronger cross-border trade ties and push for nearshoring and industrial growth in Mexico, we’re running headfirst into a persistent, homegrown threat: the unchecked flow of American guns fueling violence south of the border.

For decades, the conversation about cross-border security has focused on what’s coming into the United States — drugs, migrants, counterfeit goods. But what’s often missing is what flows out: assault weapons, semi-automatics, high-capacity magazines — most of it purchased legally and exported illegally. Roughly 70% of firearms recovered from Mexican crime scenes are traced back to the United States.

This isn’t just a law enforcement issue. It’s a serious economic and strategic liability.

As CEO of Intermestic Partners, I’ve seen how the perception — and reality — of insecurity deters long-term capital investment in critical sectors like advanced manufacturing, logistics, and clean energy across Mexico. Even in high-potential areas near the U.S. border, companies weigh their supply chain ambitions against risk models that factor in cartel activity, extortion, and theft — all made more deadly by weapons that start their journey on this side of the border.

We cannot talk about North American competitiveness without talking about North American safety.

If we expect Mexico to invest in infrastructure, rule of law, and industrial zones that benefit the U.S. as much as they do Mexican communities, then we need to match that effort — including stopping the arms that empower organized crime.

This isn’t about finger-pointing. It’s about honesty and shared responsibility.

Stopping the southbound flow of guns won’t happen overnight, but we can start by enforcing stronger outbound inspections, improving federal-state coordination, and treating arms trafficking as the national security threat it is.

Because if we don’t, it won’t just be Mexico that pays the price. It will be every business, every worker, and every dream tied to a safer, more prosperous North America.

The Border Buzz

What We Celebrate, What We Forget: Cinco de Mayo and the U.S.-Mexico Disconnect

Every year on May 5th, bars across the United States fill with drink specials, sombreros, and festive music. For many Americans, Cinco de Mayo is simply a reason to celebrate Mexican culture — or at least a surface-level version of it. But what most people miss is that this holiday commemorates something far deeper: a battle for sovereignty, identity, and dignity — one that carries lessons we still need today.

Cinco de Mayo marks the Battle of Puebla, when a vastly outnumbered Mexican army defeated Napoleon III’s French forces in 1862. It’s not Mexico’s Independence Day — that’s September 16 — and ironically, in Mexico, it’s a relatively minor holiday. But here in the United States, it has taken on a life of its own.

That’s not necessarily a bad thing. In fact, it says a lot about the evolution of Mexican-American identity, especially in cities like Los Angeles, San Antonio, and Phoenix, where cultural pride and civic engagement have long gone hand-in-hand. For many, Cinco de Mayo is less about military victory and more about celebrating resilience, biculturalism, and community empowerment.

But there’s also something troubling in how we mark the day. Too often, we embrace the symbols — the tacos, the tequila, the mariachi — while ignoring the shared history that actually binds Mexico and the U.S. together. During the time of the Battle of Puebla, the U.S. was locked in its own existential fight — the Civil War. Mexico’s resistance to French occupation helped prevent European powers from aiding the Confederacy. In that sense, Mexico wasn’t just fighting for itself — it was helping preserve the American union.

That’s the part we forget.

And today, while we raise a glass on May 5th, are we also willing to raise our voices against the policies and rhetoric that divide our two nations? Can we recognize the irony of celebrating Mexican culture while failing to stop the southbound flow of American weapons that fuel violence? Or allowing tariff wars and border theatrics to undermine the promise of regional cooperation?

Cinco de Mayo should be more than a party. It should be a reminder: that the U.S.-Mexico relationship has always been more than trade and migration — it’s about standing together in hard times.

And now more than ever, we need to remember that.

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