The Current State of Nearshoring in Mexico
Scott Edidin and Scott Pearson of supplier 6AM Sourcing (asi/46173) discuss the promo industry’s opportunities in Mexico, following President Donald Trump’s swearing-in for his second term.
Not long after his election victory, U.S. President Donald Trump promised to levy tariffs on several countries, including Mexico, on the first day of his administration. His reasoning? What he characterized as unfettered migration and a massive drug trade on the Southern border.
While those duties have yet to be enacted a week after Trump’s inauguration, discussion continues – will his administration follow through, and what does that mean for promo’s nearshoring opportunities in Mexico?
In this episode of Promo Insiders, Scott Edidin and Scott Pearson of supplier 6AM Sourcing (asi/46173), which offers expertise in sourcing promo from Mexico, discuss the state of Mexican nearshoring for the promo industry and what to watch as the two administrations – Trump’s and President Claudia Sheinbaum’s in Mexico – go toe-to-toe over trade.
“I think the two administrations can work together,” says Edidin. “I think some of the noise we’ve been hearing is more or less negotiation tactics. The two countries have worked well together in the past.”
Pearson adds that establishing an External Revenue Service, a federal agency in charge of collecting tariffs, duties and other taxes and a move that Trump has suggested in recent weeks, will take some time. In the meantime, “Mexico is the number-one importer to the U.S., so we’re going to work together.”
Key Takeaways
• Nearshoring Potential: The episode focuses on nearshoring opportunities in Mexico for the promo industry, featuring the expertise of Scott Edidin and Scott Pearson from 6AM Sourcing (asi/46173).
• Political Context: President Trump has been inaugurated for a second term, and his administration is threatening tariffs on imports from several countries, including Mexico, as a response to border issues.
• Mexico’s Leadership: Claudia Sheinbaum, the new president of Mexico, aims to work with the U.S. and attract more investment into Mexico as a manufacturing hub.
• Tariffs on Textiles: Mexico has implemented a 35% tariff on finished textiles to prevent other countries from using Mexico as a back door to avoid duties.
• Trade Relationship: Despite some trade tensions, the two administrations are expected to work together, with the potential for the promotional products industry to benefit.
• Cultural Differences: There are significant cultural differences between manufacturing in Mexico and China, with Mexico facing challenges in meeting the standards and expectations of the U.S. market.
• Supply Chain Challenges: Establishing a reliable supply chain in Mexico is difficult due to issues with on-time delivery and the depth of the supply chain compared to China.
• Long-Term Investment: Shifting production to Mexico is a long-term process that requires patience and investment in developing local manufacturers and supply chains.
• Raw Materials: Mexico has strengths in producing certain raw materials like textiles, plastics, ceramics, glassware and paper products, which can be leveraged for the promo industry.
• Optimism for the Future: There’s optimism that Mexico can become a significant manufacturing destination, but it will take years of development and investment to reach the level of operational excellence needed for promo.