US-Mexico Trade Impact

Q2 2024 set a record for northbound truck crossings from Mexico to the USA. Two charts below using data compiled by the Bureau of Transportation Statistics from Customs and Border Patrol. Thoughts: •Top chart shows quarterly not seasonally adjusted northbound truck crossings from Mexico to the USA. Q2 2024 came in at 1.97 million, which was up 4.3% from the same quarter a year ago. This figure is up 21% from Q2 2018 (the previous second quarter high prior to the COVID-19 pandemic). •Bottom chart shows year-over-year percent change at the quarterly level. The most recent quarter’s 4.3% year-over-year growth is consistent with what was observed from 2016-2018. Note that growth showed weakness during 2019 and most of 2023. The clearest outlier is Q4 2021, which was likely negative YoY because of slowdowns in U.S. motor vehicle production due to component shortages. •One thing that doesn’t quite align is Mexican manufacturing output is up only ~7% from Q2 2018. This raises the question: how are truck crossings up 20%. Some possible explanations are: [1]: More agricultural shipments heading to the USA of produce. [2]: Some freight-intensive manufacturing sectors like Mexican beverage production are sending a greater share of output northbound to the USA. [3]: Finished Chinese goods are being imported to Mexico, having a “Made in Mexico” label slapped on them to avoid tariffs, and are being sent to the USA. Implication: Q2 saw a return to solid year-over-year growth in northbound truck shipments from Mexico to the USA. It will be interesting to see how much additional growth occurs over the coming years. #supplychain #supplychainmanagement #shipsandshipping #economics #freight #trucking #logistics

The U.S. just redrew the global trade map—and Mexico emerged as the clear winner. President Trump announced expansive tariffs on dozens of countries: China now faces a 34% tariff, Vietnam nearly 50%, and even longstanding European partners were included. Noticeably absent? Mexico. That’s not a footnote—it’s the story. A simulation from the OEC shows that even a targeted 34% tariff hike on China could drive $109 billion in additional Mexican exports to the U.S. over four years. That’s more than Canada ($38B), Vietnam ($25B), and South Korea combined. And these aren’t low-value goods. The gains are concentrated in high-complexity sectors central to North American manufacturing: Computers: +$24.5B Video Displays: +$6.9B Broadcasting Equipment: +$5.6B As Asian imports become costlier, reshoring and nearshoring to North America move from possibility to necessity. Mexico now holds a rare position: globally competitive, geographically close, and politically shielded. But let’s be clear-eyed: this is a moving target. Retaliation, supply bottlenecks, and shifting policies could reshape the landscape again. Mexico’s advantage won’t sustain itself—it must be acted upon. These tariffs were meant to punish rivals. They may have just empowered a partner. Is the next move to deepen North American integration? #Trade #Mexico #SupplyChains #Nearshoring #USMCA https://lnkd.in/gTq2QJgV

Minister Piyush Goyal has done a remarkable job advancing the EU–India trade negotiations. But this agreement is not just another trade headline. It marks the beginning of a new industrial phase. In select industries, tariffs are moving toward zero. That changes competitive dynamics immediately. Advanced goods from Europe will enter India at scale. And that exposure matters. When higher-quality products enter a market, domestic companies are forced to upgrade in design, process, technology, and standards. Competition, when structured well, becomes a catalyst for capability building. This is how nations move up the value chain. If Indian companies absorb the technology, raise quality benchmarks, and build scale, this agreement could lay a powerful foundation for India’s 2047 ambitions. The fine print will determine how transformative this moment becomes.

𝗦𝗶𝗻𝗰𝗲 𝗔𝗽𝗿𝗶𝗹 2𝗻𝗱, 𝘁𝗮𝗿𝗶𝗳𝗳𝘀 𝗮𝗿𝗲 𝗯𝗮𝗰𝗸 𝗶𝗻 𝘁𝗵𝗲 𝘀𝗽𝗼𝘁𝗹𝗶𝗴𝗵𝘁. 𝗕𝘂𝘁 𝘄𝗶𝗹𝗹 𝘁𝗵𝗲𝘆 𝗯𝗿𝗶𝗻𝗴 𝗺𝗮𝗻𝘂𝗳𝗮𝗰𝘁𝘂𝗿𝗶𝗻𝗴 𝗯𝗮𝗰𝗸 𝘁𝗼 𝘁𝗵𝗲 𝗨𝗦, 𝗼𝗿 𝘀𝗶𝗺𝗽𝗹𝘆 𝗿𝗲𝗱𝗿𝗮𝘄 𝘁𝗵𝗲 𝗺𝗮𝗽? In the US, a renewed push to onshore automotive production has prompted new tariffs and industrial policies aimed at reducing reliance on global supply chains. But as my colleague Stephan Keese points out, the reality is more complex. 𝗠𝗲𝘅𝗶𝗰𝗼, 𝗻𝗼𝘁 𝘁𝗵𝗲 𝗨𝗦, 𝗺𝗮𝘆 𝘂𝗹𝘁𝗶𝗺𝗮𝘁𝗲𝗹𝘆 𝗯𝗲𝗻𝗲𝗳𝗶𝘁. 𝗪𝗵𝘆? Even with a 25% tariff, Mexico’s structural cost advantages, especially in labor and overhead, mean it remains ~7% more cost-effective to produce and export vehicles to the US than to manufacture them domestically. 𝗧𝗵𝗶𝘀 𝗿𝗮𝗶𝘀𝗲𝘀 𝗮 𝗯𝗶𝗴𝗴𝗲𝗿 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻: Can protectionist tools like tariffs truly realign deeply integrated, cross-border supply chains in the automotive industry? Or do they risk slowing innovation and raising costs without delivering the intended impact? 𝗞𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀 𝗳𝗿𝗼𝗺 𝗦𝘁𝗲𝗽𝗵𝗮𝗻’𝘀 𝗮𝗻𝗮𝗹𝘆𝘀𝗶𝘀:  🔹 Onshoring rhetoric often overlooks the real lead times, infrastructure demands, and labor dynamics involved in localization. 🔹 North America’s strength lies in regional integration, not fragmentation. 🔹 Resilience is built not through isolation, but through strategic interdependence. 𝗙𝗼𝗿 𝗴𝗹𝗼𝗯𝗮𝗹 𝗽𝗹𝗮𝘆𝗲𝗿𝘀, 𝘁𝗵𝗲𝗿𝗲’𝘀 𝗮 𝗹𝗲𝘀𝘀𝗼𝗻 𝗵𝗲𝗿𝗲:  A reactive policy stance may yield short-term wins, but long-term competitiveness requires cooperation, clarity, and a clear industrial vision. 🎧 Listen to Stephan’s full interview here: https://lnkd.in/e3WFwPNk Thanks to Stephan Keese for providing clarity on a topic that will shape supply chain strategy in the years ahead. #RolandBerger #AutomotiveIndustry #SupplyChainStrategy #IndustrialPolicy #TradePolicy #MexicoManufacturing

New data released on Wednesday showed that Mexico outpaced China to become America’s top source of official imports for the first time in 20 years — a significant shift that highlights how increased tensions between Washington and Beijing are altering trade flows. The United States’ trade deficit with China narrowed significantly last year, with goods imports from the country dropping 20% to $427 billion. American consumers and businesses turned to #Mexico, #Europe, #southkorea, #India, #Canada and #Vietnam for auto parts, shoes, toys, and raw materials. America’s total trade deficit in goods and services, including exports minus imports, narrowed 18.7%. Overall, U.S. exports increased slightly in 2023 from the previous year, despite a strong dollar and a soft global economy. U.S. imports fell annually as Americans bought less crude oil and chemicals and fewer consumer goods, including cellphones, clothes, camping gear, toys and furniture. The recent weakness in imports, and drop-off in trade with China, has partially reflected the pandemic. American consumers stuck at home during the pandemic snapped up Chinese-made laptops, toys, Covid tests, athleisure, furniture, and home exercise equipment. Even as concerns about the coronavirus faded in 2022, the U.S. continued to import many Chinese products, as bottlenecks at congested U.S. ports finally cleared and businesses restocked their warehouses. “The world couldn’t get access to enough Chinese goods in ’21, and it gorged on Chinese goods in ’22,” said Brad Setser, an economist and senior fellow at the Council on Foreign Relations. “Everything has been normalizing since then.” In 2023, U.S. quarterly imports from China were at roughly the same level as they were 10 years ago, despite a decade of growth in the American #economy and rising U.S. imports from elsewhere in the world. Economists say the relative decrease in trade with China is clearly linked to the tariffs imposed by the Trump administration and then maintained by the Biden administration. There were two episodes in recent history where U.S. trade with China slowed notably. The first was when trade tensions between the countries escalated in 2018. The second was when Russia invaded Ukraine, prompting the United States and its allies to impose strict sanctions and further reshuffling global trade relationships. Some economists caution that the U.S. reduction in trade with China might not be as sharp as bilateral data shows. That is because some multinationals have shifted portions of their manufacturing out of China and into other countries but continue to source raw materials and parts from China. And companies may simply be routing goods that are actually made in China through other countries to avoid U.S. tariffs. U.S. trade stats do not record such products as coming from China, even though a significant portion of their value would have been created there. #retailing #brands The New York Times Ana Swanson Simon Romero

Hidden #Chinese Investment in #Mexico #Disguised #Investment: Chinese companies, like Sailun Tire Americas, are investing in Mexico through offshore subsidiaries, often registered in places like Singapore, making it harder to track as “Chinese” FDI. #Official #Data #Gaps: A Rhodium Group report estimates that Chinese investment in Mexico could be six times higher than official figures show, highlighting potential undercounting from offshore investment structures. #US #Concerns and #Trade #Tensions #Avoiding #Tariffs: There are concerns among US lawmakers that Mexico may be used by China to circumvent US tariffs, increasing scrutiny of Mexico’s trade practices. #Potential for #Trade #Disputes: The US, across bipartisan lines, may push for stricter measures, especially with former President Trump signaling intentions to renegotiate the US-Mexico-Canada Agreement (USMCA) if re-elected, aiming to limit Chinese products entering the US via Mexico. #Economic and #Political Stakes for #Mexico #Key #Trading #Relationship: Mexico sends more than 75% of its exports to the US, and maintaining this trade relationship is critical, with the USMCA serving as a foundation for foreign investment. #Government #Actions: Mexico is considering measures to improve transparency around Chinese investments, including national security screenings and supply chain regulations to align more closely with US standards. #Sector-#Specific #Implications #Auto #Industry #Focus: Chinese interest is notably high in Mexico’s auto sector, crucial for both Mexico’s economy and politically sensitive US swing states. #Energy and #Infrastructure: New Mexican leadership is prioritizing clean energy and infrastructure projects, sectors where Chinese companies also have strong interests, potentially increasing US scrutiny. #Strategic #Decisions #Ahead #Balancing #Benefits and #Risks: Mexico’s Deputy Economy Minister, Luis Rosendo, emphasized the importance of US-Mexico collaboration. Experts suggest that a cautious approach is needed to assess whether Chinese investments align with Mexico’s development goals and its essential US relationship. Text based on Article by Christine Murray in Financial Times Graph created in Macrobond Financial

In response to the US tariffs, Singapore companies are recalibrating their trade strategies — and many are turning to Free Trade Agreements (FTAs) to stay competitive.   At Singapore Business Federation, we've seen a 1.5x increase in FTA-related enquiries in Q2 2025 compared to the same period last year. Businesses are actively looking to diversify beyond traditional markets, leveraging agreements like the ASEAN Trade in Goods Agreement (ATIGA) and the ASEAN-China FTA to access fast-growing economies in the region.   With increased protectionism, businesses now operate in a world of "clubs and fences" - doing businesses in clubs offer lower tariffs and streamlined regulatory approvals, and even investment guarantees, while fences are set up to deter businesses on grounds of economic or national security.   The good news is that Singapore has one of the most "club memberships" - with 28 FTAs covering over 65 economies (representing 90% of our exports). Singapore stands out as one of the most well-connected economies globally.   SBF Member, T1 Glass recorded a 39% revenue growth after applying FTAs to expand into Southeast Asia! Our Trade Advisors helped T1 navigate the process to obtain the Certificate of Origins to qualify for lower tariffs under ATIGA.    This shows just how impactful these agreements can be — particularly for manufacturers, chemical firms, and logistics providers.   Connect with our team at the Centre for the Future of Trade and Investment (Peng Kwang HENG, Marcel Pang, Hock Chye G., Johan Ruslan to find out how your company can leverage FTA to strengthen your business and enjoy the benefits of the Singapore FTA club membership!   View the full interview here: https://lnkd.in/g_VAwmVy

When I set out to explore how the United States’ tariffs, introduced in April 2025, are shaking up the global data center industry beyond APAC, I found a story far bigger than just rising hardware costs. These tariffs, some spiking as high as 145% on Chinese imports aren’t just squeezing budgets for GPUs, servers, and networking gear. They’re triggering a dramatic realignment in where and how the world’s digital infrastructure is built. As I dug deeper, it became clear that Asian manufacturing giants like China and Taiwan are facing the brunt of these new policies, with their once-dominant positions now under threat. In a twist few predicted, Mexico is emerging as a major beneficiary. Thanks to trade loopholes in the USMCA agreement, many GPU and server assemblies can now enter the US tariff-free if they’re routed through Mexican facilities, making the country a new hub for data center hardware assembly. But the story doesn’t end with shifting supply chains. I also uncovered how these tariffs are rippling through the financial system, raising the cost of capital and injecting uncertainty into data center investment cycles. There’s a looming possibility of even tougher tariffs on semiconductors, threatening to further disrupt a sector already stretched by global demand for AI and cloud computing power. By weaving together the latest figures, trade policy details, and industry analysis, I found a digital infrastructure world being rapidly redrawn by geopolitics, one where winners and losers are determined not just by innovation, but by the ability to navigate a new era of economic nationalism. Read the full story:

India–EU Free Trade Agreement. 21 Years in the Making. A Deal That Could Quietly Redraw India’s Economic Future. ✅ When Numbers Stop Being Abstract 1. Today, India–EU trade stands at ₹10.5 lakh crore. 2. The EU is India’s second-largest trading partner. 3. India is the EU’s tenth-largest. Those rankings don’t tell the full story. What matters is this: India exports value. Europe exports standards. The agreement tries to reconcile both. ✅ What’s Really on the Table 1. A Free Trade Agreement for goods and services 2. A Bilateral Investment Treaty to protect capital 3. Geographical Indication protection for origin-based products 4. The headline promise is simple: 90% of goods moving toward zero tariffs over 10–15 years. ✅ Impact on all sectors 1. Pharmaceuticals: India’s Quiet Strength India already supplies 40% of Europe’s generic medicines. Yet regulatory duplication quietly erodes 15–25% of revenues. If harmonised, Indian pharma companies could save ₹2,000–3,000 crore every year. 2. Automobiles: Fear Exceeds Reality India’s auto sector contributes ₹22 lakh crore annually and employs 3.7 crore people. Even with zero tariffs, a European car still lands at ₹23–24 lakh, against Indian equivalents at ₹12–18 lakh. The real opportunity lies elsewhere. Auto components already export ₹1.5 lakh crore annually. An EU opening could add ₹16,000–25,000 crore every year. 3. Textiles: Where Tariffs Decide Winners Textiles employ 4.5 crore Indians. European tariffs of 11–15% have kept Indian apparel less competitive. Removing them could add ₹41,000–66,000 crore in exports annually and create 20–30 lakh jobs. 4. Agriculture: The Hardest Chapter Agriculture supports 20 crore Indians. Europe subsidises its farmers with ₹4.5–5 lakh crore every year. India exports ₹45000 cr of agri goods to the EU. The EU exports ₹15,000 crore to India. If handled carefully, India could unlock ₹8,000–16,000 cr in additional agri exports. 5. IT & Services: Mobility Is the Prize India’s IT sector generates ₹20.3 lakh crore in revenue. Europe accounts for nearly ₹4.8 lakh crore of that. The ask is simple: mobility. An extra 1 lakh work permits annually could unlock ₹66000–100000 crore in exports every year. ✅ Let me share #Rajspectives 1. If executed well, Trade could rise to ₹16–18 lakh crore. GDP impact could reach ₹1.5–3 lakh crore. 20–40 lakh jobs could be created. 2. Some disruption is inevitable; 2–5 lakh jobs may need reskilling. 3. Negotiations may conclude in 2025. Ratification could take two years. Tariff reductions will stretch over a decade. This agreement is not about tariffs. It’s about choosing predictability over populism. Like every enduring reform, its success won’t be visible in headlines. It will show up slowly in factories, exports, balance sheets, and careers built quietly. If done right, this won’t just be a trade deal. It will be India’s most consequential economic partnership since liberalisation. #india #europe #business #trade #economy #growth

Unlocking the Potential of Mexico's Maquiladora Sector: Insights from a Headhunter In my 30 years as a Headhunter with expertise in the global manufacturing sector, I've observed firsthand the transformative potential of Mexico's maquiladora sector for international corporations. The maquiladora industry, characterized by its skilled workforce, proximity to the United States, and competitive costs, presents a golden opportunity for companies looking to establish export-oriented manufacturing operations. However, achieving "world-class" success in this complex sector requires a strategic approach, one that addresses common pitfalls and leverages the unique advantages of the region. A prevalent issue, as highlighted by a PwC report, is the lack of cultural understanding among global leaders. This gap often leads to misaligned strategies and inefficiencies in Mexican operations. To bridge this gap, leaders must immerse themselves in Mexican culture, engage with local teams, and tailor strategies to resonate with the local workforce. This alignment is crucial for the success of maquiladora operations and their ability to compete globally. Another challenge is the short-term focus on cost reduction, which can compromise long-term sustainability and competitiveness. Companies should adopt a long-term perspective, investing in talent development, quality systems, and process improvement to build a foundation for sustainable operations. The maquiladora sector also faces supply chain challenges, with higher logistics costs in Mexico compared to the OECD average. To enhance supply chain efficiency, companies should diversify their supplier base, partner with reliable local firms, and explore near-sourcing opportunities. Navigating the complex regulatory landscape in Mexico is another hurdle. Building a robust legal team and staying informed about legislative updates are essential steps to ensure compliance and protect the business from legal risks. Underinvestment in research and development is a common pitfall that limits innovation. Companies should leverage Mexico's talented workforce, collaborate with local institutions, and embrace new technologies to enhance their competitiveness in the export market. In conclusion, leading successful export-oriented manufacturing operations in Mexico requires cultural sensitivity, a long-term vision, and adaptability. By addressing these challenges and adopting strategic approaches, international corporations can unlock the full potential of Mexico's maquiladora sector and achieve sustainable success in the global market. #MaquiladoraSector #ExportOperations #GlobalManufacturing #InternationalBusiness #MexicoManufacturing #SupplyChainManagement #CulturalUnderstanding #LongTermStrategy #LogisticsCosts #RegulatoryCompliance #InnovationInManufacturing #SustainableBusiness #GlobalTrade #ExportMarketFocus #DataDrivenDecisions #ForbesRecognizedHeadhunters #topnotchfinders #sanfordrose