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back to index backLATINtalk March,  2017


International Location Report: Mexico Maintaining a Place in Global Manufacturing

Despite dealing with a collapse in oil prices and threats of new tariffs to be imposed by the incoming Trump administration, Mexico retains significant economic advantages.

The moment Donald Trump declared that the United States is going to slap tariffs on Mexican manufactured goods imported to the United States, all discussion of the future of the Mexican economy became dominated by the prospect of a Trump presidential-election victory and its potential effects on the North American Free Trade Agreement. And now that there's a new Trump administration in Washington, D.C., everyone has been trying to predict exactly how President Trump will make good on his promise to American voters and how the southern member of NAFTA will respond.

It may have been telling that Trump's biggest gambit after the election was to persuade United Technologies' Carrier air-conditioning division to reverse its earlier plan to move 2,200 jobs from Indiana to its operations in Mexico, and instead to retain about half of those jobs in America.

"Mexico is in deep trouble," Alan Blinder, head of the Economics department at Princeton University, told Area Development. "Even if Trump can't outright abrogate NAFTA, there are many things he can do on his own authority that will throw a huge monkey wrench into trade between the U.S. and Mexico."

Yet Mexico can rely on a significant counterweight to any such plans: its established, significant place in global manufacturing and logistical networks that have been built with the appeal of Mexican factories at the center.

To read entire article, please click here.

Source: Area Development
- GAI






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