Navigating Mexico’s evolving trade landscape
The Global Business Briefing series is presented in partnership with the Salt Lake Chamber.
Mexico remains a critical market for U.S. trade and manufacturing as businesses navigate changing trade policies, tariffs, and supply chain strategies across North America.
The Global Business Briefing reviewed the status of the United States-Mexico-Canada Agreement (USMCA) joint review, U.S. trade policy priorities, and the opportunities and challenges of nearshoring, manufacturing, and outsourcing in Mexico.
The discussion featured perspectives from the Office of the U.S. Trade Representative (USTR) and Amalga Group, a nearshore outsourcing and business services firm.
USMCA review and U.S. trade priorities
USMCA review and U.S. trade priorities
USMCA joint review: Following the mandated six-year review on July 1, the U.S. chose not to extend the agreement for an additional 16 years at this stage. USMCA remains in effect, with annual joint reviews required until all three countries agree to an extension or the agreement expires.
Bilateral negotiations: Formal negotiations began in May, with the last formal round held July 21–23 in Mexico City. Additional rounds were expected before year-end.
North American coordination: While issues are currently addressed bilaterally with Mexico and Canada separately, future results may be harmonized into the broader USMCA framework.
Core U.S. priorities and concerns
USTR officials outlined several priorities shaping ongoing trade discussions:
Trade deficits: Reducing the U.S. goods trade deficit with Mexico, which reached $197 billion in 2025, and the combined goods trade deficit with Mexico and Canada, totaling approximately $250 billion.
Third-party transshipment: Preventing excess production capacity from non-market economies, primarily China and Southeast Asia, from using Mexico to circumvent U.S. tariffs.
Trade compliance and sector issues: Strengthening enforcement of rules of origin in automotive and manufacturing industries, labor standards, environmental laws, Mexican energy policy restrictions, and dairy market access.
Public consultation and business input
USTR is seeking input from businesses as part of the 2027 USMCA joint review process.
Public comment period: A Federal Register notice was announced Oct. 2, with written comments due Jan. 12, 2027.
Public hearing: A hearing will be scheduled, with separate submission processes for written comments and requests to appear.
Business input: USTR is seeking feedback on compliance challenges, specific trade barriers, rules of origin, and market access issues.
Businesses can review the official USTR notice and public comment instructions.
Mexico’s trade and nearshoring opportunities
Amalga Group founder and CEO Jens Gould shared on-the-ground perspectives on Mexico's manufacturing environment, nearshoring trends, and operational considerations for U.S. companies.
Trade dynamics and tariffs
U.S.-Mexico trade: Mexico is the United States' largest trading partner.
USMCA compliance: Supply chains are increasingly consolidating within North America. As tariffs have changed, more companies are using USMCA preferences to qualify for duty-free treatment, increasing the importance of regional sourcing and rules-of-origin compliance.
Mexico's tariffs: Mexico implemented tariffs ranging from 5% to 50% on specified imports from countries without applicable free trade agreements, including China, India, Vietnam, and South Korea. These measures increase costs for manufacturers dependent on Asian inputs while potentially benefiting U.S. exporters selling into Mexico.
Key growth drivers in Mexico
Data center demand: Rapid growth in U.S. data center construction is driving expansion in Mexican manufacturing of HVAC systems, electrical cooling equipment, fiber-optic cables, and electrification components.
Industrial real estate: Recent development has increased industrial vacancy rates, particularly in northern Mexico, including Monterrey and Nuevo León, making manufacturing space more accessible and cost-effective.
Business process outsourcing and services
Demand for nearshore talent continues to grow, supported by time-zone proximity, cultural familiarity, and an adaptable, AI-forward workforce.
Opportunities span software engineering, customer operations, and shared services, offering companies additional options for outsourcing and operational expansion.
Managing risks when operating in Mexico
For Utah companies exploring manufacturing, sourcing, or outsourcing in Mexico, several operational considerations warrant attention.
Legal and judicial reforms: Recent reforms introducing elections for federal judges create additional uncertainty. Companies should consider contracts specifying U.S. governing law and binding arbitration.
Utilities and infrastructure: Energy distribution, transmission, and industrial water rights can face periodic constraints. Secure binding utility commitments in writing before signing facility leases.
Security and logistics: Risks vary by region, with cargo theft and highway extortion presenting concerns for transportation operations. Businesses should carefully vet carriers and establish visitor protocols.
Resources for Utah businesses
Trade missions and market connections
Utah businesses exploring Mexico can build relationships with prospective customers, suppliers, and partners through targeted business matchmaking and in-market meetings. A trade mission to Mexico is planned for spring 2027, with opportunities to explore new markets and strengthen commercial relationships.
Foreign-Trade Zone (FTZ)
Utah companies importing goods or materials may be able to defer, reduce, or eliminate customs duties through the FTZ program, improving cash flow and reducing costs. WTC Utah offers complimentary cost-benefit analyses to help companies evaluate potential savings and eligibility.
Trade policy and business advisory support
Businesses navigating tariffs, trade barriers, or supply chain changes can access guidance on international market entry, export strategies, and potential business connections through WTC Utah's advisory services.
Companies with specific USMCA concerns can also submit feedback directly to USTR as part of the ongoing joint review process.
Resources and contacts
For additional guidance and support, connect with:
Nearshore outsourcing and business services: Amalga Group, Jens Gould.
USMCA policy and trade barriers: Office of the U.S. Trade Representative, Ethan M. Stallings or Braeden Young.
Export receivables and payment protection: Export-Import Bank of the United States, Toya Woods.