Mexico is making a strong case for companies looking to enter the American market. If you’re worried about fragile supply chains, want to lessen your reliance on China, or need a cost-effective location near the U.S. with favorable trade rules, Mexico is worth considering.
Many companies—big and small—from Asia, Europe, and beyond have already made the move. Well-known brands like Adidas, Samsung, Honda, Hyundai, Nestle, Volkswagen, Volvo, and Lego have all established operations in Mexico’s industrial parks. This trend has only accelerated as companies faced supply chain disruptions during the pandemic and as political tensions between the U.S. and China mounted.
Canada, a crucial partner in North America’s production landscape, has also seen increased investment. For instance, Honda recently announced plans to invest about $11 billion into new electric vehicle and battery production plants in Ontario. Other big names like Toyota and Volvo also have facilities in Canada, benefiting from its close relationship with both Mexico and the U.S.
However, changes in trade policies can complicate things. Recent tariffs imposed by President Trump—25% on goods from Mexico and Canada and 10% on Canadian energy—have caught many companies off guard. These measures have created uncertainty for those considering investment in supply chains that span North America.
“If you’re an investment officer in a company, where do you decide to invest?” asks Mary E. Lovely, a senior fellow at the Peterson Institute for International Economics. It’s a tough question, especially when trade agreements that were carefully negotiated can change so quickly.
In 2020, Trump agreed to a new trade pact with Mexico and Canada. Now, these recent tariffs feel like they are undermining that agreement. As businesses navigate this complicated landscape, they will have to think carefully about their next steps.
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Trump, Donald J,Customs (Tariff),Protectionism (Trade),International Trade and World Market,United States International Relations,China,Europe,Canada,Mexico,Factories and Manufacturing,Supply Chain