Tai met with Mexico’s minister of economy, Raquel Buenrostro, in February and asked about “the lack of transparency” around Mexico’s imports of steel and aluminum from “third countries.”

The US president is responding to concerns about tariff evasion, and this trend will persist after November’s election. A review of the USMCA is scheduled for 2026.

Growing domestic manufacturing is something that US President Joe Biden and his opponent, former President Donald Trump, support, but they have different ideas about how to get there.

Recently, Biden told Pittsburgh steelworkers that the US government ought to think about increasing tariffs on Chinese steel. Furthermore, should Trump win reelection, he has suggested imposing a 60% tariff on Chinese imports.

“As the 2024 presidential campaign progresses, the issue of US-Mexico-China trade will only intensify, as both US presidential candidates strive to win crucial Midwestern swing states that have substantial auto industries,” according to S&P Global’s Sevilla-Macip and Raines.

A slow change

Although supply chains are changing, it’s not always easy to move factories. It may need a large commitment of people, money, and time. However, the businesses that are progressing are opening up long-term doors for the Mexican manufacturing sector.

The northern Mexican city of Monterrey seems to be experiencing a boom, according to RBC portfolio manager Christoffer Enemaerke. On a recent visit, he told CNN, “We met with companies and experts in the real estate industry, and the feedback was that Mexico, especially in the northern part of the country, is likely to see multi-year growth driven by nearshoring.”

For instance, Tesla (TSLA) announced last year that it will construct a new plant in Monterrey. At the company’s investor day, Elon Musk, the CEO, expressed his excitement, saying that the factory would add capacity rather than take away from existing capacity.

Mexico's manufacturing sector is booming. Both China and the US are joining the fray
Mexico’s manufacturing sector is booming. Both China and the US are joining the fray

Other stories