The U.S.–Mexico trade relationship is one of the most critical drivers of manufacturing supply chains today. With more than $800 billion in goods crossing the border annually, companies on both sides are rethinking their strategies for sourcing, production, logistics, and growth.
In this session, Lisa Anderson, President of LMA Consulting Group, talks with Daniel Hersh, VP of Hersh Family Investments, on the latest status of the border, trade and tariff realities, and how manufacturers can effectively manage supply chains on the border.
What we cover:
- Mexico- U.S. Relationship: The U.S. and Mexico presidents seem to have a good relationship, and since the USMCA agreement remains intact until next year, there has been a calm in terms of the U.S.-Mexico trade while other countries were concerned about tariff spikes.
- USMCA Renegotiation: Since the agreement must be renewed next year, there is concern since it looks like the status quo might change. Thus, distributors and 3PLs are delaying decisions as they won’t have certainty until June 2026 when changes to the USMCA are finalized. From a real estate point-of-view, expansion and leasing decisions have been delayed.
- Business mood: Mexico has been far more positive and proactive since tariffs were announced. Mexico has put troops on the border, worked to reduce cartel activity, and put tariffs on Chinese goods for transshipping. The general feeling is that Mexico is positioned well, and the Mexican business leaders generally support toughness with the cartels.
- Trade forecast: The USMCA sets up win-win-win trade in the region. With Mexico’s labor benefits and ability to scale, Canada’s natural resources, and the U.S.’s consumer base, a win-win-win emerges. Thus, we expect Mexico to have huge opportunities as volume transitions from China while the U.S. focuses on critical items such as defense, pharmaceuticals,
- Nearshoring momentum: The manufacturing hub in Monterrey increased dramatically the last several years as companies searched for low-cost labor and migrating from China. In addition, China was investing heavily with an eye to transshipping; however, that was curtailed as Trump came on the scene. As is typical in manufacturing, water and power are the limiting factors to growth.
- Manufacturing growth: The future is bright especially as the USMCA is ironed out next year. The consensus is that Mexico will be robust as companies move away from China. Since China dominates the world in manufacturing with substantial volumes, Mexico’s ability to scale will be of paramount importance.
- Technology adoption: Automated tools are emerging to better support customs, trade, and logistics activities like yard management and inventory planning. In addition, there is a ramp up in facility technology although adoption is slow. Autonomous trucks are also gaining momentum.
Key takeaway: The U.S.–Mexico trade relationship isn’t just about proximity — it’s about building resilient, cost-effective and scalable supply chains that can withstand global disruption while fueling growth. Companies must think medium-term. Do not wait for full clarity if you don’t want to be left in the dust. Look at your ability to scale, vertically integrate with strategic partners, and get ready for growth.
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