Industry News

The Near-Shoring Trend: Will China’s Loss Be Mexico’s Gain?

By February 23, 2021 No Comments

The formation of maquiladoras, factories mostly located in areas close to the U.S. border, kicked off an era of vibrant manufacturing activity in Mexico in the 1960s. For years afterward, they churned out large volumes of components that could be exported to the U.S. duty-free. By the late 1990s, the maquilas were employing more than one million Mexico workers. Further spurring production in Mexico was the launch of regular double-stack train services that carried parts north for U.S. automakers.

 

Activity slackened when U.S. companies began shifting production to China, where labor rates were cheaper and more readily available than in Mexico. But recent geopolitical shifts and other factors suggest that Mexico might be poised for another surge of manufacturing activity.

 

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