The SupplyChainBrain Podcast Will Tariffs Kill Mexico’s Manufacturing Boom?
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May 9, 2025 Maggie Switek, an economist and research director at the Milken Institute, discusses the potential impact of Trump-era tariffs on Mexico's manufacturing sector. She explores how these tariffs could disrupt Mexico’s role as a key manufacturing hub for the U.S. market. The conversation also highlights the shift of companies from China to Mexico and the growing participation of women in STEM fields, which could bolster the labor market. Additionally, Switek discusses Claudia Sheinbaum's economic strategies and their implications for U.S.-Mexico relations.
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Mexico's Manufacturing Growth Drivers
- Mexico's manufacturing boom is driven by U.S. companies seeking to nearshore production from China.
- Tariffs targeting Mexico are evolving but U.S.-Mexico trade under USMCA remains largely tariff-free for compliant goods.
Tariffs Won't Halt Mexico Growth
- Mexico's economic growth is closely linked to the U.S. economy and tariffs alone won't halt growth.
- The outcome depends largely on future tariff policies and U.S. economic conditions.
China's Role in Mexico Overstated
- China's investment in Mexico is small compared to the U.S. despite appearances.
- In 2023, 42.5% of Mexico's intermediate product imports came from the U.S., reflecting strong integration.