A flood of companies eyeing Mexico as a safe haven from the U. S. trade war with China risks evaporating after President Donald Trump last week threatened to unleash tariffs on Mexico too.
A flood of companies eyeing Mexico as a safe haven from the U. S. trade war with China risks evaporating after President Donald Trump last week threatened to unleash tariffs on Mexico too.
News of Trump’s tariff plan has battered the Mexican peso and cast doubt over the future ratification of a new North American trade agreement, a treaty overhauled during months of agonizing talks previously demanded by the U. S. president.
Just when companies thought that trade deal had made Mexico a tempting manufacturing alternative to China, Washington’s new threats have thrown several off balance again.
Take the recent experience of outsourcing firm Tecma Group, which saw a surge in interest from companies mulling a move to Mexico as Trump raised tariffs to 25% on $200 billion of Chinese goods.
Tecma, which manages some 75 factories in Mexico, had been approached “every week” by companies selling items from furniture to ink pens seeking a pathway out of China and into Mexico, according to Alan Russell, its chief executive and chairman.
Now, after Trump vowed to introduce escalating tariffs of 5% on all Mexican exports to the United States from Monday if Mexico does not contain a surge in migrants to the U. S. border, those hoped-for investments are at risk of being frozen, Russell says.
“A board of directors is not going to say, ‘Yeah let’s do this’ in the face of a 25% tariff,” Russell said.

Continue reading...