Mexico-US Trade Partnership is Booming
Mexico finished 2021 as the No. 1 trade partner of the U.S. for only the second time ever, according to Forbes. And trade between the two countries is only expected to grow as more businesses look to nearshore.
"A lot of companies that went to China, Thailand or Vietnam are considering bringing their investments back to North America," Kenneth Smith Ramos, a partner at Agon, a full-service antitrust and regulatory advisory firm in Mexico, told Freightwaves. "Because of … lower labor costs and a skilled workforce, we're seeing Mexico become a very attractive location for that investment."
Mattel, the manufacturer of famous toys like Barbie, Hot Wheels and UNO, announced last month plans to make Nuevo Leon, Mexico, a hub for its biggest plant in the world. "Nuevo Leon has a strategic position in the north of the country. It has the right infrastructure and skilled labor. This investment positions the State as a leading producer in the toy industry, not only nationally, but globally and we hope will attract co-manufacturers and suppliers to the region," said Ivan Rivas Rodriguez, economy secretary of Nuevo Leon State.
Manufacturers that sit near the Mexican-U.S. border are benefiting the most so far. Mexico's exports surpassed $80 billion already this year, and U.S. trade is up more than 20% over the 2021 record pace, according to U.S. Census Bureau data released Tuesday.
"The five Mexican states responsible for the biggest chunk of exports are all along the border. Monterrey-based Grupo Financiero BASE, which does half of its lending in the state of Nuevo Leon bordering Texas … expects that exports will grow another 6% in 2022," reads an article from Bloomberg.
"It's a year of big opportunities," Julio Escandon, BASE's chief executive officer, said in a recent interview, per Bloomberg. "Because of the pandemic and probably the situation in Ukraine, the supply chain that comes from Asia is moving to Mexico."