IN THE NEWS: In U.S. trade war with China, Mexico is emerging as the big winner
CNBC
September 20, 2024
Lori Ann LaRocco
FROM THE ARTICLE: A CNBC analysis of recent trade data highlights a surge in trade between China and Mexico, driven by companies seeking to bypass U.S. tariffs through legal manufacturing shifts under existing trade laws, such as the United States-Mexico-Canada Agreement (USMCA). Chinese firms are relocating production to Mexico, where raw materials from China are transformed into finished goods labeled "Made in Mexico" and exported to the U.S. This shift is part of the "China Plus One" strategy and is further fueled by nearshoring, changing logistics strategies, and global trade uncertainties. Key concerns include potential future tariffs, ongoing political debate, and the risk of black-market activities in response to increasing trade barriers.
Logistics companies, including DHL, Maersk, Uber Freight, and ITS Logistics, have been expanding their footprint to capture the additional freight opportunities moving in and out of Mexico. North American freight rail company CPKC is completing the construction of its new international rail bridge from Laredo, Texas to Nuevo Laredo, Tamaulipas, expected to be operational in Q4 of this year.
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Paul Brashier, Vice President of Global Supply Chain at ITS Logistics, said since 2018, the company has seen a steady increase in demand for capacity out of Mexico to Texas markets, including Laredo, San Antonio, Austin, and Dallas/Ft. Worth.
"Over the last two years, demand has grown exponentially," Brashier said. "We are heavily investing in Texas with cross-border services in Laredo, a one-million square foot distribution center in Haslet, and our logistics offices in downtown Ft. Worth."