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In U.S. trade war with China, Mexico is emerging as the big winner Trade between China and Mexico has surged amidst ongoing U.S. tariff discussions, with Chinese companies increasingly shifting manufacturing to Mexico. This allows Chinese firms to import raw materials and components into Mexico, manufacture products there, and then export to the U.S. under the "Made in Mexico" label, taking advantage of the USMCA trade agreement. Nearshoring from China to Mexico is driven by economic and geopolitical factors, such as reduced tariffs and supply chain disruptions, making Mexico a key player in North American trade. Companies across sectors, including automobiles and technology, are capitalizing on this shift. Data shows a significant rise in container shipments from China to Mexico, with Mexico-U.S. trade growing rapidly. However, this shift has raised political tensions, with both U.S. presidential candidates proposing increased trade barriers. Meanwhile, logistics firms are expanding in Mexico to capture the growing demand for cross-border trade. #TradeSurge #ChinaMexicoTrade #Nearshoring #USMCA #SupplyChain #ManufacturingShift #Logistics #CrossBorderTrade #Tariffs #GlobalEconomy Stay informed: https://lnkd.in/gMEbuYhk

In U.S. trade war with China, Mexico is emerging as the big winner New data shows a significant surge in trade between China and Mexico, driven by Chinese companies nearshoring manufacturing operations to Mexico. By bringing raw materials from China and assembling products in Mexico, these companies take advantage of Mexico’s trade agreements, such as the USMCA, to reclassify goods as "Made in Mexico," bypassing U.S. tariffs on Chinese products. This nearshoring trend is especially prominent in sectors like automobiles and textiles, where components undergo "substantial transformation" in Mexico, allowing them to qualify for tariff exemptions when exported to the U.S. European and U.S. companies are also increasingly nearshoring to Mexico, capitalizing on its trade networks and proximity to the U.S. Trade between China and Mexico has surged, with container traffic up 26.2% in the first half of 2024. Mexico’s free trade agreements make it a key manufacturing hub for Chinese goods entering the U.S., avoiding high tariffs on Chinese imports. This shift has positioned Mexico as the top U.S. importer, surpassing China. Mexico’s role as a logistics hub has grown, with companies like Tesla, Hyundai, and BYD investing in the country. Cross-border trucking and rail transport from Mexico to the U.S. have increased, further solidifying its importance in U.S. supply chains. New infrastructure projects, like the Laredo rail bridge, are being built to accommodate rising trade volumes. As tariffs and trade barriers increase, experts predict Mexico’s importance as a trade route will continue growing through the end of the decade. Companies are front-loading goods through Mexico in anticipation of potential new tariffs under a future Trump administration, and Mexico's role in North American supply chains is expected to expand further. https://lnkd.in/giaE-y5q

In U.S. trade war with China, Mexico is emerging as the big winner New data shows a significant surge in trade between China and Mexico, driven by Chinese companies nearshoring manufacturing operations to Mexico. By bringing raw materials from China and assembling products in Mexico, these companies take advantage of Mexico’s trade agreements, such as the USMCA, to reclassify goods as "Made in Mexico," bypassing U.S. tariffs on Chinese products. This nearshoring trend is especially prominent in sectors like automobiles and textiles, where components undergo "substantial transformation" in Mexico, allowing them to qualify for tariff exemptions when exported to the U.S. European and U.S. companies are also increasingly nearshoring to Mexico, capitalizing on its trade networks and proximity to the U.S. Trade between China and Mexico has surged, with container traffic up 26.2% in the first half of 2024. Mexico’s free trade agreements make it a key manufacturing hub for Chinese goods entering the U.S., avoiding high tariffs on Chinese imports. This shift has positioned Mexico as the top U.S. importer, surpassing China. Mexico’s role as a logistics hub has grown, with companies like Tesla, Hyundai, and BYD investing in the country. Cross-border trucking and rail transport from Mexico to the U.S. have increased, further solidifying its importance in U.S. supply chains. New infrastructure projects, like the Laredo rail bridge, are being built to accommodate rising trade volumes. As tariffs and trade barriers increase, experts predict Mexico’s importance as a trade route will continue growing through the end of the decade. Companies are front-loading goods through Mexico in anticipation of potential new tariffs under a future Trump administration, and Mexico's role in North American supply chains is expected to expand further. https://lnkd.in/giaE-y5q

Mexico's rise as a key trade hub is reshaping US container availability, impacting supply chains and logistics. Companies are shifting production from China to Mexico, leveraging USMCA and avoiding US tariffs. This has led to: • 26.2% increase in China-Mexico container trade • Record US-Mexico border crossings • Laredo, Texas becoming a crucial logistics hub Resulting changes: 1. More cross-border trucking and rail demand 2. Increased border container facilities needed 3. Shift from direct China-US to China-Mexico-US routes For container traders this means: Container availability in US inland locations will continue to decrease, which will put upwards price pressure on the trading market. Worth sharing: https://lnkd.in/drP-kV4e by Lori Ann LaRocco at CNBC Container xChange

🇲🇽 The New Trade Landscape: China-Mexico Backdoor Booms Amid Tariffs In a world where trade dynamics are constantly shifting, the latest analysis reveals a significant surge in trade between China and Mexico. This “backdoor” trade has become a strategic maneuver for companies looking to sidestep the tariffs imposed during the Trump and Biden administrations. By leveraging Mexico’s manufacturing capabilities, Chinese firms are finding new ways to bring their products into the U.S. market, all while adhering to existing trade laws. The CNBC article highlights how Chinese companies are increasingly moving their production to Mexico to avoid hefty U.S. tariffs. This shift is not just a workaround but a strategic move that aligns with the principles of nearshoring and the USMCA trade agreement. The trend is driven by the need for more efficient logistics and the desire to mitigate risks associated with the Uyghur Forced Labor Prevention Act (UFLPA) and other trade uncertainties. At John S. James Co., we understand the complexities of international trade and the importance of staying ahead of industry trends. As U.S. Customs Brokers and Freight Forwarders, we offer comprehensive services to ensure your shipments move smoothly between the U.S. and Mexico. Our expertise in the USMCA trade agreement and our robust risk management solutions can help you navigate these challenging times. Learn more about our services at www.johnsjames.com. #Trade #Logistics #FreightForwarding #CustomsBrokerage #USMCA #Nearshoring #ChinaPlusOne #SupplyChain #RiskManagement #UFLPA #CNBC #Mexico #China

More inbound U.S. volumes from China are arriving at the Mexican coast, translating to telling growth for cross-border trade and nearshoring business models. Check out today's blog for a closer look: . . . #supplychain #internationalshipping #crossbordertrade #mexico #nearshoring #import #china #manufacturing #logistics #logisticscompany #CommerceExpressInc

TRADE ALERT- my latest deep dive into the Trump/ Biden tariffs. You know me this report is full of data - Xeneta VesselBot-Enabling Sustainable Supply Chains Moody's Motive and commentary by Peter Sand Constantine Komodromos Mary E. Lovely Christine McDaniel Evelyn Suarez Redwood Logistics Mexico Jordan Dewart DHL A.P. Moller - Maersk ITS Logistics Freightos Uber Freight China-Mexico 'backdoor' trade booms in Trump, Biden tariff erai #logistics #logisticsmanagement #mexico #usmca #tradewar #tariffs #maritimenews #businessnews

Mexico is substantially increasing trade with the US & Mexico as the nearshoring supply chain trend takes root and flourishes. Shipping & freight volumes continue to grow at a dizzying pace. Can Mexico's infrastructure and labor pool handle the boom? https://lnkd.in/giaE-y5q #supplychain #nearshoring #mexicobusiness #shipping #freight

“Tariffs imposed by the Mexican government serve to incentivise Chinese companies to invest and produce in Mexico – a ‘natural partner’ for China to export its manufacturing capacity overseas, according to Mexico’s envoy to the country. And Chinese companies investing in Mexico need not be worried about the rising wariness or even threats from the United States, as their legitimate rights are protected under Mexico’s legal framework, ambassador Jesús Seade told the South China Morning Post. ‘Mexico needs diversification of its political, economic and commercial basket, and China is a key actor of that and a good friend for Mexico,’ Seade said. While it is crucial for Mexico to maintain a good relationship with the US, which has a huge influence – politically, economically and culturally – on Mexico, it is equally important to have a very good relationship with the rest of the world, he said. The Latin American country has increasingly become a hot destination for Chinese companies.” “Under the United States-Mexico-Canada Agreement (USMCA), a free-trade pact between the three countries that came into effect in 2020, products produced in Mexico that meet certain rules of origin can be exported to the US without tariffs. That put Mexico at a big advantage. Last year, Mexico became the US’ biggest source of imports, ending China’s 17-year streak with that title. Trade between China and Mexico has also been soaring of late. Annual growth in container shipping between China and Mexico increased by 34.8 per cent in 2023, compared with just a 3.5 per cent jump in 2022, according to shipping data platform Xeneta. In the first seven months of this year, the total trade value between the two countries reached US$63.6 billion, up 12.4 per cent compared with the same period in 2023, according to data from China Customs. China has maintained its position as Mexico’s second main supplier, with the value of products imported reaching US$114 billion in 2023.” “‘In relation to the United States, they would prefer us to work only with the United States, but we are clear we don’t want to do that,’ Seade said. ‘On the contrary, we are eagerly working on attracting Chinese partnership and Chinese investment’. ‘It is just that we prefer Chinese companies to produce in Mexico, provide employment in Mexico and bring technology, rather than exporting the goods in a cold way that brings no other benefit than the goods themselves.’ Among all foreign investment, Chinese investment in Mexico is particularly welcome, Seade said, because ‘China is the engine of growth, globally, and it’s such a fantastic manufacturer and also a source of technology’. Increasing exports to China is the other way, Seade said. China is currently the third-biggest destination for Mexican exports, after the US and Canada, with products mainly comprising minerals and agricultural products. ‘There are lots of further exports we want to make. We are actively negotiating with China,’ he said.”

🚛 Mexico-U.S. Trade Boom Drives Logistics Expansion and Raises Tariff Concerns 🇲🇽🤝🇺🇸 With Mexican trade volumes reaching historic levels under the USMCA, logistics giants like Maersk are rapidly scaling operations to meet demand. However, U.S. manufacturers are concerned about the “Made in Mexico” designation, which allows products assembled in Mexico to enter the U.S. tariff-free. 📈 This has sparked controversy, as companies like Zekelman Industries allege that some firms are using Mexico as a gateway to circumvent U.S. tariffs. Imports from China to Mexico are up 22% this year, adding to last year’s 33% increase as manufacturers shift supply chains southward. 🌎 📧 Read More: https://lnkd.in/gJAgfcGn #MexicoTrade #USMCABenefits #CrossBorderCommerce #TariffConcerns #GlobalSupplyChain #MadeInMexico #Logistics #ManufacturingTrends