As await the confirmation of President Trums new tariff plan Mexico outlined their ambitions for economic growth, global sourcing and trade tariff structure.
Mexican President Claudia Sheinbaum unveiled the ambitious Mexico plan , aiming to propel Mexico into the ranks of the world’s top 10 economies. This comprehensive strategy includes several key measures that will have significant global implications, particularly for China.
Reducing Reliance on Chinese Imports
One of the primary goals of the Mexico Plan is to decrease the country’s dependence on imports from China. By boosting domestic production, Mexico aims to strengthen its local industries and create more jobs. This shift is likely to benefit domestic Mexican industries and US suppliers, while Chinese exporters may face challenges. Additionally other global sourcing markets will undoubtedly step into the markets opportunities previously occupied by China. India and Türkiye will be well positioned to build their export business into Mexico. Enabling Mexican companies to build a supply bridge to the goal of Mexican manufacture.
ET2C International global sourcing experts
ET2C International are a British owned global sourcing company with over 23 years’ experience helping our clients to make their sourcing simple. Our 200 colleagues are based in offices across major sourcing markets including Mexico.
Our team in Mexico work to deliver insight and knowledge of the Mexican manufacturing market supply side market and combine this with a deep understanding of the Mexican demand side opportunity.
To learn more about building demand in Mexico or identify a manufacturing supply network contact@et2cint.com
Encouraging Relocation of Manufacturing Companies from Asia
The plan also seeks to attract companies from Asia, including China, to relocate their operations to Mexico. This move is expected to benefit Mexico, the US, and Canada by creating new economic opportunities and strengthening regional ties. However, it could pose challenges for China and other Asian countries that may lose business.
Increasing Investment in Key Sectors
Mexico aims to raise public and private investment from 25% to 28% of GDP by 2030, focusing on sectors like energy, petrochemicals, electromobility, and semiconductors. This increased investment is poised to boost the Mexican economy and attract US investors, while competing foreign investors may find it harder to penetrate these markets.
Strengthening Regional Trade (USMCA)
Leveraging the United States-Mexico-Canada Agreement (USMCA), the Mexico Plan aims to enhance Mexico’s position in regional trade and reduce the $80 billion trade deficit with China. This initiative is expected to benefit Mexico, the US, and Canada, while potentially disadvantaging China and other non-USMCA countries.
Mexico’s New Economic plan and implication for global sourcing
The Mexico Plan represents a bold step towards economic growth and independence. By reducing reliance on Chinese imports, encouraging company relocations, increasing investment in key sectors, and strengthening regional trade, Mexico is positioning itself as a formidable player on the global stage. As these initiatives unfold, it will be interesting to see how the global economic landscape evolves. The critical element in the plan to enable success will be the time gap between tariffs being enabled and new manufacturing capacity being brough online in Mexico.
As this capacity comes on line the opportunity to fill the supply side gap will be picked up by India and Türkiye. Two major exported who so far have remained free of tariff threats from any nation. They continue to be seen as relative safe havens for global sourcing in the coming year.
To discuss this further contact@et2cint.com
