Latin America Product Sourcing Guide // What Products are Made in Latin America, and what are the Tariffs
In the evolving global trade landscape, businesses continually seek new regions to diversify supply chains, reduce costs, and access unique products. With its abundant natural resources, expanding manufacturing base, and strategic proximity to North American markets, Latin America offers compelling opportunities for forward-thinking companies. However, recent U.S. tariff implementations have created a new economic reality that necessitates reassessing sourcing strategies to maintain cost efficiency and supply chain resilience.
This comprehensive guide explores how businesses can navigate Latin American sourcing after these significant policy changes, identifying opportunities while mitigating new challenges.
Update April 9, 2025: Trump has announced a 90 pause on tariff which means that all countries listed will be a 10% for the time being.,
Understanding the New Tariff Landscape
On April 2, 2025, President Donald Trump announced a sweeping series of tariffs that have fundamentally altered the global trading environment. These measures include a universal 10% baseline tariff on imports from all countries, with certain strategic exceptions. Additionally, higher "reciprocal" tariffs were imposed on specific nations deemed to have unfair trade practices or significant trade surpluses with the United States. These measures took effect on April 9, 2025, giving businesses minimal time to adapt their supply chain strategies.
Implementing these tariffs represents a significant shift in U.S. trade policy, creating a more complex environment for importers. For businesses sourcing from Latin America, understanding the specific implications for each country in the region has become essential for maintaining competitive advantage and cost control.
Tariff Implications for Latin American Countries
The impact of these new tariffs varies significantly across Latin American nations:
Mexico and Canada: These neighboring countries remain largely exempt from the new tariffs under the provisions of the United States-Mexico-Canada Agreement (USMCA). This exemption maintains their privileged position in the North American market and potentially enhances their attractiveness as sourcing destinations relative to other global options.
Brazil, Argentina, Chile, and Peru: These major South American economies are subject to the baseline 10% tariff without additional reciprocal tariffs. While this represents an increased cost burden, it is considerably more favorable than the higher tariffs imposed on certain Asian and European competitors.
For businesses with established Latin American supply chains or those considering a pivot to the region, these tariffs impact the cost-effectiveness of various sourcing options. A detailed analysis of each country's production capabilities, pricing structures, and the applicable tariff rates has become essential for strategic sourcing decisions.
Latin America: Tariff Rates & Key Export Products
| Country | U.S. Tariff Rate | Top Export Products |
|---|---|---|
| Mexico | Exempt (USMCA) | Automotive parts, electronics, medical devices, textiles, apparel |
| Brazil | 10% | Soybeans, iron ore, crude petroleum, sugar, coffee |
| Argentina | 10% | Soybeans, corn, wheat, beef, wine |
| Chile | 10% | Copper, grapes, wine, fish fillets, cherries |
| Peru | 10% | Copper, gold, zinc, refined petroleum, coffee |
| Colombia | 10% | Crude petroleum, coal, coffee, cut flowers, gold |
| Ecuador | 10% | Crude petroleum, bananas, shrimp, cut flowers, cocoa |
| Guatemala | 10% | Bananas, coffee, raw sugar, vegetables, apparel |
| Costa Rica | 10% | Medical instruments, bananas, tropical fruits, integrated circuits, coffee |
| Dominican Republic | 10% | Gold, medical instruments, cigars, apparel, sugar |
| Honduras | 10% | Apparel, coffee, bananas, shrimp, cigars |
| El Salvador | 10% | Apparel, coffee, sugar, ethanol, iron products |
| Nicaragua | 19% | Apparel, gold, coffee, beef, sugar |
| Paraguay | 10% | Soybeans, beef, corn, wheat, rice |
| Uruguay | 10% | Beef, wood, dairy products, soybeans, rice |
| Bolivia | 10% | Natural gas, zinc, soybeans, gold, silver |
| Panama | 10% | Refined petroleum, ships, bananas, shrimp, medical instruments |
| Venezuela | 15% | Crude petroleum, refined petroleum, gold, petroleum gas, iron |
Country-Specific Sourcing Opportunities and Tariff Considerations
Mexico: The Manufacturing Powerhouse
Mexico is Latin America's manufacturing leader and one of the United States' largest trading partners. Its manufacturing sector has experienced significant growth and sophistication over the past decades, transitioning from basic assembly operations to complex manufacturing processes and design capabilities.
Key Products:
Automotive parts and assemblies
Electronics and electrical components
Medical devices
Textiles and apparel
Aerospace components
Furniture and home goods
Tariff Rate: Exempt from the new tariffs under USMCA provisions.
Mexico's advanced manufacturing infrastructure, competitive labor costs, and geographical proximity to the U.S. market create a compelling value proposition. The average transit time from Mexican manufacturing centers to U.S. distribution points is just 3-5 days, compared to weeks for Asian alternatives. This proximity enables more responsive supply chains and reduces inventory carrying costs.
The exemption from new tariffs under USMCA further enhances Mexico's competitiveness, creating a significant advantage over countries subject to the baseline or reciprocal tariff rates. Many businesses are accelerating their "nearshoring" initiatives, shifting production from Asia to Mexico to capitalize on these advantages while mitigating geopolitical risks.
Brazil: The Agricultural and Mineral Giant
Brazil's massive economy—the largest in Latin America—offers diverse sourcing opportunities across multiple sectors. Its vast territory encompasses various climate zones, enabling the production of a wide range of agricultural products, while its mineral wealth supports extensive mining and related industries.
Key Products:
Soybeans and other agricultural commodities
Coffee (both commodity and specialty grades)
Beef and poultry
Iron ore and other minerals
Footwear and leather goods
Furniture and wood products
Tariff Rate: Subject to the 10% baseline tariff.
Brazil's diverse economy and competitive pricing have traditionally made it an attractive sourcing destination. Despite implementing the 10% baseline tariff, many Brazilian products remain competitive due to their inherent quality and favorable production costs. For agricultural products in particular, Brazil's scale of production and efficiency often result in pricing that can absorb the tariff impact while remaining competitive.
Logistics can be more challenging when sourcing from Brazil than Mexico, with typical ocean freight transit times of 12-18 days to U.S. ports. However, for products where Brazil has significant competitive advantages or unique capabilities, these longer lead times are often offset by cost or quality benefits.
Argentina: Agricultural Strengths
Argentina has long been recognized for its agricultural prowess. Its vast, fertile plains support extensive farming operations. While the country has faced economic challenges, its agricultural sector remains robust and globally competitive.
Key Products:
Soybeans, corn, and wheat
Beef and dairy products
Wine and other beverages
Leather and related products
Fruit and vegetables (often counter-seasonal to Northern Hemisphere)
Tariff Rate: Subject to the 10% baseline tariff.
Argentina's agricultural sector benefits from favorable climatic conditions and extensive experience in export markets. While the 10% tariff affects landed costs, many Argentine products' quality and unique characteristics continue to make them attractive for specific market segments. Argentine beef, for example, commands premium pricing in many markets due to its grain-fed quality and distinctive flavor profile.
Despite the tariff impact, Argentina remains a compelling option for businesses seeking agricultural products with specific quality characteristics or those looking to source counter-seasonal produce.
Chile: Mining and Agriculture
Chile's narrow geography stretches along South America's western edge, creating diverse growing conditions and access to significant mineral deposits. The country has developed one of Latin America's most stable economies and trade-friendly business environments.
Key Products:
Copper and other minerals
Wine and spirits
Fresh and dried fruits
Seafood
Forestry products
Tariff Rate: Subject to the 10% baseline tariff.
Chile's mining industry, particularly copper extraction, is globally significant and represents a major sourcing opportunity for industries requiring these materials. The country's agricultural products, especially wines and fruits, have established strong reputations for quality in international markets.
While the 10% tariff impacts pricing, Chile's established trade infrastructure and experience in export markets help mitigate some of these effects. The country's numerous free trade agreements with other nations make it an attractive platform for triangular trade strategies.
Peru: Diverse Offerings
Peru offers a remarkable diversity of products, reflecting its varied geography, which includes coastal areas, Andean highlands, and the Amazonian rainforest. This geographic diversity translates to various sourcing opportunities across multiple sectors.
Key Products:
Copper, gold, and other minerals
Textiles, particularly those using native fibers like alpaca
Coffee and cacao
Fresh produce, including asparagus and avocados
Fishery products
Tariff Rate: Subject to the 10% baseline tariff.
Peru's diverse product range makes it relevant for various sourcing strategies. Over recent decades, the country has made significant investments in export infrastructure, facilitating international trade. While the tariff adds a cost layer, Peru's traditional emphasis on quality and uniqueness in many product categories helps maintain its competitiveness.
Peruvian textiles, particularly those utilizing native fibers like alpaca, offer distinctive characteristics that command premium pricing even with the additional tariff costs. Similarly, the country's specialty coffee and cacao have established niches to sustain tariff impacts.
Colombia: Emerging Player
Colombia has become increasingly significant in Latin American manufacturing and agricultural exports. Following decades of internal challenges, the country has developed more stable conditions for business and trade, opening up new sourcing possibilities.
Key Products:
Coffee (particularly specialty grades)
Cut flowers
Textiles and apparel
Emeralds and other gemstones
Tropical fruits
Tariff Rate: Subject to the 10% baseline tariff as with other South American nations.
Colombia's growing manufacturing sector and traditional strengths in products like coffee and flowers make it a noteworthy sourcing destination. The country's strategic location, with ports on the Pacific and Atlantic oceans, provides logistical advantages for certain trade routes.
Colombian coffee has maintained its premium positioning in global markets through quality differentiation and specialty production methods, allowing it to remain competitive despite the tariff impact.
Central America: Niche Specializations
The smaller economies of Central America have developed specialized production capabilities that can be valuable for specific sourcing needs. Each country offers unique advantages:
Guatemala:
Coffee (particularly high-altitude specialty grades)
Textiles and traditional handicrafts
Fresh vegetables and tropical fruits
Honduras:
Coffee
Bananas and other tropical fruits
Shrimp and seafood
Costa Rica:
Medical devices
Electronics components
Pineapples, bananas, and specialty coffee
Tariff Rates: Tariffs are generally subject to the 10% baseline tariff, with specific rates potentially varying based on product categories.
These Central American nations offer specialized products that serve particular market niches. Costa Rica's development of medical device manufacturing, for example, represents a high-value specialization that can often absorb tariff impacts due to the technical expertise involved.
The proximity of these countries to the U.S. market creates logistical advantages similar to those enjoyed by Mexico, though on a smaller scale. Central American countries can provide targeted sourcing solutions for businesses seeking specialized agricultural products or specific manufacturing capabilities despite the tariff environment.
Strategies for Navigating Tariffs in Latin American Sourcing
The new tariff landscape necessitates a strategic approach to Latin American sourcing. Businesses can implement several strategies to optimize their supply chains in this changed environment:
Comprehensive Cost Analysis
The baseline 10% tariff fundamentally alters the economic equation for many products. Successful businesses are conducting thorough analyses of total landed costs, including not only the direct tariff impact but also related factors such as:
Product base cost
Transportation expenses
Inventory carrying costs
Compliance and documentation requirements
Currency exchange considerations
Quality and reliability factors
This holistic approach to cost analysis often reveals that certain Latin American sources remain competitive despite tariff impacts, particularly when compared to alternatives facing higher tariff rates or having significant logistical disadvantages.
Supplier Negotiations
The implementation of tariffs creates new imperatives for supplier relationships. Forward-thinking companies are engaging with their Latin American suppliers to explore possibilities for:
Cost-sharing arrangements to distribute tariff impacts
Price adjustments that reflect current market realities
Process improvements to enhance efficiency and reduce base costs
Product redesigns that might qualify for different tariff classifications
Increased order volumes to achieve economies of scale
These negotiations require a collaborative approach to maintain mutually beneficial relationships while addressing the changed economic realities.
Diversification Strategies
In response to the tariff environment, many businesses diversify their sourcing strategies to include suppliers from countries with more favorable tariff treatments. This might involve:
Shifting production from countries facing higher reciprocal tariffs to Latin American alternatives
Balancing sourcing between tariff-exempt Mexico and 10%-tariff South American nations
Developing multiple sources for critical components to enhance supply chain resilience
This diversification addresses tariff considerations and strengthens overall supply chain resilience against future disruptions or policy changes.
Staying Informed
The current trade policy environment remains dynamic and subject to change. Successful businesses are implementing systems to:
Monitor trade policy developments continuously
Track potential modifications to tariff schedules
Assess political developments that might signal policy shifts
Engage with industry associations and advisory services that provide specialized intelligence
This information-focused approach enables more agile responses to the evolving tariff landscape.
Leveraging Trade Agreements
Existing trade agreements provide opportunities for tariff mitigation. The USMCA, in particular, offers significant advantages for Mexico-based sourcing. Businesses are examining:
Rules of origin requirements to ensure qualification for preferential treatment
Documentation procedures to demonstrate compliance
Potential restructuring of supply chains to maximize agreement benefits
Comparative advantages between different trade agreement regions
Understanding and leveraging these agreements can create substantial cost advantages in the current tariff environment.
Exploring Alternative Markets
Some businesses identify and assess emerging markets within Latin America that may offer favorable conditions despite the general tariff situation. This includes:
Evaluating smaller economies with specialized capabilities
Investigating regions with developing infrastructure and improving business environments
Considering countries with specific tax incentives or free trade zones
Assessing nations with particular natural resource advantages
These alternative markets sometimes offer unique advantages that can counterbalance tariff impacts.
Investing in Local Operations
For businesses with sufficient scale and long-term vision, establishing local operations or partnerships within Latin America can circumvent tariffs while creating additional strategic benefits. Options include:
Manufacturing or assembly operations in Mexico to leverage USMCA exemptions
Processing facilities in South American countries to add value before export
Strategic partnerships with established local producers
Joint ventures that combine external expertise with local knowledge
These investments require significant commitment but can create sustainable competitive advantages in the new tariff environment.
Final Thoughts // Latin American Sourcing
While recent U.S. tariff implementations have altered the landscape for global sourcing, Latin America presents significant opportunities for businesses that approach the region strategically. The combination of USMCA exemptions for Mexico and the relatively moderate 10% baseline tariff for other major economies in the region creates a more favorable situation than many alternative sourcing destinations.
By understanding each country's specific production capabilities, comparative advantages, and applicable tariff rates, businesses can make informed decisions to optimize their supply chains in this new trade environment. Many Latin American economies' proximity advantages, cultural alignment, and growing manufacturing sophistication further enhance their attractiveness as sourcing partners.
The most successful companies will view the current tariff situation not simply as a challenge to be managed but as an opportunity to reassess and strengthen their sourcing strategies. By taking a comprehensive approach that considers total costs, supply chain resilience, and long-term strategic positioning, businesses can unlock the substantial potential that Latin America continues to offer as a sourcing rAs the global trade environment evolves, maintaining flexibility and reassessing sourcing strategies will be essential. Companies that develop nuanced understandings of Latin American markets and capabilities will be best positioned to thrive amid these changes, turning potential obstacles into competitive advantages through strategic sourcing decisions.
COSMO SOURCING // Go Straight To The Source!
Latin America offers immense sourcing potential—from Mexico’s advanced manufacturing to Peru’s premium agricultural exports and Colombia’s growing apparel sector. However, navigating the regional differences, regulations, and new U.S. tariffs requires experience, local insight, and the right partners.
At Cosmo Sourcing, we help companies like yours connect with reliable, vetted manufacturers across Latin America, ensuring high-quality production, competitive pricing, and smooth communication. Whether you're sourcing textiles, agricultural goods, industrial products, or artisanal items, we’ll guide you through the entire process—from supplier selection to production oversight and shipping coordination.
✅ Transparent flat-rate pricing
✅ Experience in complex international procurement
✅ Flexible sourcing solutions tailored to your product needs
Let’s discuss your sourcing goals.
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Cosmo Sourcing – Your trusted sourcing partner in Latin America.