In alignment with The Council of Supply Chain Management Professionals’ (CSCMP) ongoing expansion into Mexico, CSCMP’s CEO, Mark Baxa, led a virtual discussion on November 22nd with Senator Carlos Humberto Suarez, Secretary of the USMCA Commission Senator of Mexico | Nuevo Leon State – Monterrey and Javier Zarazua “Mr. Nearshoring,” Managing Partner – JL Nearshoring Mexico, LLC.
Here are some take aways from the discussion:
Some manufacturers establishing a presence in Mexico are making the strategic decision of moving to a smaller town to capitalize on available labor and being the big employer in a market.
Mexico is finding talent eager to transition into manufacturing. While there is still a cost advantage relative to labor wages, Mexico’s minimum wage has been increasing the past 6 years and a law just passed to connect its minimum wage increase to its inflation rate.
Mexico is focused on building out capacity by improving rail infrastructure, i.e. connecting the Pacific & Atlantic via train.
The ministry of public security in Mexico is focused on strengthening its intelligence sector and using investigation tools they said are like those used by the FBI in the U.S.
The Mexican representatives’ expectations for upcoming trade negotiations with the incoming U.S. administration were cautiously optimistic.
As China continues to invest in Mexico (taking advantage of duty-free tariffs in Mexico), they noted the importance of protecting its treaty with the U.S. and being careful to define fair conditions. They also indicated AI would be included in upcoming negotiations.
They noted Trump’s threat of 60% tariffs to China and 25% tariffs for other countries would create a tsunami of companies coming to Mexico; and they’ve already seeing an increase of companies contacting Mexico since the conclusion of the U.S. 2024 presidential election.
Mexico is planning to grow and be competitive in specific industries such as electronics, semi-conductors, Automotive, Aerospace, and Medical.
