Mexico is seeing a manufacturing boom amid US-China trade tensions. More American companies are outsourcing factory operations to Mexico – with, among other reasons, the need to de-risk supply chains.
But more Chinese corporations are also investing billions in Mexico as a production base to get closer to regional consumers – a practice called nearshoring – and to get around US tariffs imposed on Chinese exports since the 2018 Trump era. Since 2023, China has overtaken the US as Latin America’s top trading partner.
00:00 Intro
01:08 Mexico’s manufacturing renaissance
02:48 Why Chinese companies are investing in Mexico
04:43 Is China a rising threat to the US in Latin American trade?
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About the show: As de-risking deepens, China’s economy loses billions in investments. Is this the end of made-in-China, and the rise of new manufacturing powerhouses like India, Indonesia, and Mexico? What is the new form of globalisation that is emerging?
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In recent years, there has been increasing speculation about the relationship between Mexico and China, and the potential implications for the United States. Some experts argue that Mexico is becoming China’s “backdoor” into the US, a strategic gateway for Chinese goods and investments.
The economic ties between Mexico and China have strengthened significantly in recent years. China has become Mexico’s second-largest trading partner, behind only the United States. The two countries have also deepened their cooperation in a variety of sectors, including manufacturing, infrastructure, and technology.
One of the key factors driving this partnership is the ongoing trade war between the US and China. As the two largest economies in the world continue to impose tariffs and trade restrictions on each other, Mexico has emerged as an attractive alternative for Chinese businesses looking to access the lucrative US market. For example, some Chinese companies have established manufacturing operations in Mexico in order to benefit from the country’s favorable trade agreements with the US.
Furthermore, Mexico’s strategic geographic location is extremely significant in this equation. With a long and porous border with the US, Mexico is an ideal entry point for Chinese goods into the American market. This has raised concerns in the US about the potential for Chinese products to enter the country through Mexico, circumventing any trade barriers that may be in place.
There are also concerns about the growing presence of Chinese investors in Mexico. China has been increasingly investing in Mexican infrastructure projects and manufacturing facilities, which has raised worries about the potential for Chinese influence in the country.
This situation has sparked debate over the implications for the US. Some argue that the deepening economic ties between Mexico and China could allow Chinese companies to gain a stronger foothold in the US market, potentially undermining American businesses. Additionally, there are concerns about the security implications of Chinese investments and influence in Mexico, particularly in sensitive sectors such as telecommunications and technology.
On the other hand, others argue that Mexico’s growing relationship with China could also benefit the US. A stronger Mexican economy could lead to increased demand for American goods and services, creating new opportunities for US businesses. Additionally, some see the potential for trilateral cooperation between the US, Mexico, and China as a way to foster economic development and stability in the region.
In response to these developments, the US government has expressed its support for Mexico and has sought to strengthen its own economic ties with the country. Recently, the United States-Mexico-Canada Agreement (USMCA) was signed, aimed at modernizing and replacing the North American Free Trade Agreement (NAFTA). This agreement is designed to promote closer economic cooperation between the three countries, and it may serve as a counterbalance to China’s growing influence in Mexico.
Overall, the evolving relationship between Mexico and China has raised complex and nuanced questions about the economic and geopolitical dynamics in the region. While there are potential risks associated with Mexico becoming a conduit for Chinese interests into the US, there are also opportunities for all three nations to collaborate and create a more prosperous North American region. The key will be to find a balance that promotes economic growth, fosters healthy competition, and safeguards national security interests.
Everybody understand can is a Singapore based channel. And it's current PM is of Indian origin..it's mostly biased nonsense
American have a lot of Right wing Politicians and think thank
Also buy Indian Products ❤
The problem is ,why China shouldn't be the No.1 trade partner of Mexico, if the Mexicon would like to?
I am an expat in China and I know many expat wouldn’t move to Juarez or Reynosa. My previous company have an automated line in mexico and we had to be in armored car and can not stay in Mexico. Only in Texas side. No. It’s not an exaggeration.
Chinese supply chain, from speed, reliabilty and network of sub-suppliers are unmatched. I remember the first time I came here. What’s your equivalent of Mouser or digikey or mcmaster carr or grainger?
They have a freaking market for that and no it’s not next day delivery. In most cases it’s next hour. Same with 3d printing, machining, fixtures, etc.
the only thing came below my expectations is kuaidi or delivery. How is it not possible to ship next day ? Even if I want to pay, there’s no next day guarantee. Everyone says shipping in china is fast? I beg to differ. The US has better shipping. Not cheap. But available. In China, even you wanted to pay, not possible with SF or YTO or other big shippers.
in 30 years? Maybe. But in 3 years? Impossible.
We need to be very aware. We need Trump to keep up the pressure.
Hungary is China Backdoor to Europe.
just China made better offer for Mexico – USA can invest in Mexico , pay more and people will choose US
America has an aggressive spirit but is about into war… In contrast to China, which tends to be mercantile, Both of them are good at managing industry,,
Maria Salazar actually said "our backyard", "our region" 04:45
Is it really bad to have another manufacturing giant I. The world? Must we be under USA dominance forever? Pardon me but Americans need to adopt to new changes, the world isn't waiting on them to be leaders …adopt or perish
I try to avoid Chinese products when possible. I don't want to support communism. India will hopefully become the new leader.
Thanks Trump <=== He did that.
Your backyard? Are you sure ? So far as I know, no countries in Latin America would buy you!
What does US want the World to do? Stand still? China is building, creating real jobs "not marker speculation". China is helping to improve the standard of living across the World without a single bloodshed. — Mexico and Central America is in "your backyard" YET, all you do is complain about them and all your concern is in Asia's backyard, China's backyard, Africa leadership, Russia backyard. We have to give credit where credit is due… Congratulations China. Well done. and Well wishes to Mexico and Central America.
Why pee in the pants when China hasn't even visited Mexico with their aircraft carriers, as the US describes 'freedom of Navigation '
In China, you see many Starbucks, Mac Donald, KFC & Pizza Hut outlets, people wear Nike products and carry Apple products. No one in China calls this invasion.
I like to see the panic tone of this US Congress woman. It showed incompetence and uselessness in her unintelligent speech. Latin America is your "backyard"? Since when? Did you take care of your backyard? Did you ask these countries if they agree? LOL …..
4:52 calling Latin America "our backyard"… this kind of derogatory attitude towards latin America is what is bringing it closer to China and away from the US!
Mexican Manufacturing Chineses products will help improve the quality and will give access to occidental Markets
latin america is murica’s backyard, and how dare china invest there!
Woah! Chinese investors are very rich and very smart because it's cheaper to send goods if you manufacture in the area where you sell your goods.
Chinese have a better plan than those US.
Monterrey does not neighbor Torreon. Thats like saying Albany, NY borders Montreal (similar distance). It goes to show cna's conplete lack of interest on reality in Mexico. This is nothing but China fear porn, painting Mexico as a powerless pawn along the way, when actually it's implementing a very effective industrial policy including historic public infrastrusture spending and very attractive interest rates to attract FDI (the Mexican peso has been along the top 3 strongest world currencies since the pandemic).
Chinese are known for unfair trade practices. I am not at all surprised to see Chinese companies using Trojan horse strategy to keep trading with their main customer US .
Why doesn't the United States invest more than China in the region? They have always belittled and stigmatized their neighbors. If they invest more in Latin America, the region's economy will improve, and migration will also be reduced.
The arrogant US sees Latin America as its backyard?
Unbelievable. None of these countries will resist?
hind bengali urdu gujarati punjab and sikh are all dervied from sanksrit sanksrit and tamil should be the only langauges in india.
But Maxicans got job then good.
This is a good move by usa and West. As we see during covid, China can't be trusted, hence supply chain needs to be diversified to Vietnam, Indonesia, Malaysia etc . This would prevent monopoly. Also China is a communist regime. This is the only way Chinese monopoly can be prevented. After few years, Mexico, Asian countries would setup OEM shops and Chinese hegemony will be gone.