MEXICO Trends and Developments Contributed by: Javier Domínguez, Santiago Carrillo and Gabriel Torres, Ritch Mueller
have indicated that new industrial projects are already underway. Nearshoring 2025: tariffs and uncertainty Following the Trump administration’s inaugura - tion in January 2025, the United States under - went a significant shift in its perspective on inter - national trade. On 2 April 2025, or, as the Trump administration has named it, “Liberation Day” altered all the paradigms on which international trade has been based since the Second World War. President Donald Trump announced sweeping new tariffs under the International Economic Emergency Powers Act (IEEPA). This includes a baseline 10% tariff on all imported goods, effec - tive 5th April, and higher, retaliatory targeted reciprocal tariffs (ranging from 10% to 49%) on approximately 60 countries, starting 9th April. The new measures aim to combat what Trump described as decades of unfair trade practices, marking a significant escalation in US protec - tionist policy with global implications. Canada and Mexico were exempted from the baseline 10% tariffs for USMCA-compliant goods but remain subject to 25% tariffs under existing fentanyl and migration IEEPA orders. Non-USMCA-compliant goods will be taxed at 25%, and certain non-USMCA-compliant energy and potash exports will be subject to a 10% tar - iff. In the event the existing fentanyl/migration IEEPA orders are terminated, USMCA-compliant goods would continue to receive preferential treatment, while non-USMCA-compliant goods would be subject to a 12% reciprocal tariff. Tar - iffs on automobiles and automobile parts, steel and aluminium, announced before Liberation Day, remain in place for all countries.
A 10% global tariff on 2025 goods imports, esti - mated at approximately USD3.3 trillion, trans - lates to a USD330 billion tax hike on US con - sumers and businesses. Although Trump seeks to encourage reshoring, experts note that this strategy faces several obstacles. Labour costs in Mexico remain sig - nificantly lower than in the United States, and the country boasts a consolidated industrial infra - structure, thanks to the maquiladora system. Tariff threats are therefore unlikely to succeed in massively repatriating US production; however, they could slow down the growth of nearshoring in Mexico. On the other hand, although trade tensions between the United States and China have led Chinese companies to establish operations in Mexico to take advantage of the benefits of the USMCA, this has raised concerns about a pos - sible trade triangulation. That is, Chinese prod - ucts could enter the US market under Mexican preferential rules, which could trigger even more tariff restrictions by the US. Nearshoring disappeared from the SHCP’s pan - orama, according to the Pre-Criteria for 2026, presented on 1 April 2025. The promise of a massive influx of investment to Mexico, result - ing from the relocation of global supply chains and expected to boost growth, is no longer part of the scenarios foreseen by the SHCP for the Mexican economy. The turnaround implied by President Donald Trump’s foreign policy, which in his second term has made tariffs a pressure mechanism for other issues, has rendered the promise of relocation obsolete in the SHCP’s landscape, and the term has effectively disap - peared from the 2026 Pre-Criteria delivered to Congress in April 2025. Apart from stating that foreign direct investment last year reached an
696 CHAMBERS.COM
Powered by FlippingBook