Impact of Recent Tariffs on Nearshoring to Mexico

The recent shifts in trade policies, particularly changes to tariffs, have significantly influenced business decisions regarding nearshoring operations to Mexico. The imposition of tariffs, especially in the context of the United States-Mexico trade relations, has led companies to reassess their strategies for outsourcing and relocating manufacturing and other business functions. Tariffs And Nearshoring: Uncertainty, Strategy And A Path Forward Here, we’ll explore the impact of these tariff changes on nearshoring to Mexico.

What are Tariffs?

The tariffs being imposed by the Trump administration are just taxes on imported goods.  Governments can impose tariffs to regulate trade policies, protect domestic companies, and find a way to influence international relations. In the past, U.S.-Mexico trade has benefited from agreements like NAFTA and its successor, the USMCA. However, the recent escalations in tariff policies by the U.S. has affected many countries and created new complexities.

Right now, the U.S. has implemented tariffs of up to 25% on certain Mexican imports. They are primarily targeting automotive components, electronics, and select consumer goods. In response to the US tariffs, Mexico has enacted their own tariffs ranging from 5% to 20% on American agricultural products, metals, and various consumer items.  These tariffs, similar to tariffs enacted on other countries could disrupt the cross-border trade. We will need to stay tuned as to what the outcomes of the tariffs will be on businesses across the US. Impact of Tariffs on U.S.- Mexico Trade and Manufacturing

The Shift Toward Mexico

While tariffs with Mexico are high, they pale in comparison to those imposed on China.  This will play a significant role in driving US businesses to reevaluate their dependence on China manufacturing and, perhaps, re-consider other countries as possible alternatives.  Mexico has emerged as an attractive alternative for the following reasons:

  • Proximity to the U.S.: Mexico’s proximity to the U.S. means that manufactured goods can be shipped at lower transportation costs and more quickly when compared to products shipped from China. The ability to shorten deliveries and reduce shipping times and costs provides a competitive advantage, particularly in industries where speed-to-market is critical.
  • Cost Competitiveness: While Mexico’s labor costs are generally higher than in China, they remain lower than in the U.S., making Mexico an attractive option for companies looking to reduce costs while avoiding the tariffs on Chinese imports.

Challenges Due to Tariffs, even for Nearshoring

While certain trade agreements like NAFTA and USMCA have generally made Mexico more attractive, there are some challenges:

  • Uncertainty around Tariff Policies: Despite the stable tariff framework of the past, in our current economic environment, the tariffs can change almost hourly.  These fluctuations can create a huge amount of uncertainty for businesses considering nearshoring options in the future.
  • Tariffs on Services: While tariffs have currently been enacted only on goods at this point , it is possible that in the future tariffs could be enacted on services as well.  Companies must consider whether it makes financial sense to consider Mexico as a country to provide, for example, AR and AP services and whether those could be likely to have tariffs imposed as well.

Short-Term vs. Long-Term Considerations

The higher tariffs imposed on some countries in Asia far exceed those imposed on Mexico.  This has encouraged many companies to look at the short-term solution of relocating their offshoring manufacturing to a near shore location. Navigating 2025: Trends And Risks Impacting Nearshoring In Mexico In the long term, however, the impact of these tariffs could be less than expected as companies find ways to mitigate costs through technology improvements, automation and AI. 

In Conclusion

While tariffs are shaping nearshoring decisions, they should be only one part of a larger and more strategic decision that includes factors like long term labor costs, skill availability, and infrastructure investment.

 

Perks in a Work from Home World

While working from home, in and of itself, used to be considered a perk, it is quickly becoming the norm, whether 100% remote or the more popular hybrid model where employees work two or three days from home and the remainder in the office.  However, this change has made other “in-office” perks more elusive.  5 HR trends you should be paying attention to in 2022: HowNow (gethownow.com)Benefits like free lunches, after-work happy hours, and casual Fridays are difficult to consider when working in an all or partial work from home environment.  So, what perks do employees want most in this new world?  

Global benefits and rewards platforms are popping up all over that allow companies to care for, connect with and celebrate their employees no matter where they are or what they want.  These platforms focus not only on physical wellbeing but also on social/emotional and financial wellbeing.  As the lines between work and home continue to blur, employees have growing expectations that employers will view them as holistic human beings where work is a part of their identity, but certainly not their whole identity.  A study by Perkbox Global Employee Benefits and Rewards Platform | Perkbox suggests that over half of the employees surveyed said Employee discounts are the most coveted.  This was followed by a three-way tie for greater recognition for your work, unlimited amount of vacation time, and at-home entertainment.  There is also growing demand for mental health or wellness days and extended free mental health counseling services. 

Employee Discounts

There is a myriad of market leaders who provide Employee discounts.  Some of the larger include names like Corporate Offers, www.corporateoffers.com Next Jump www.nextjump.com, and Anyperk www.anyperk.com.  Most of these services have both a free, limited option service and a paid service.  Normally these will differ in the way an employer can customize the specific offerings to their employee base.  If you choose to go this route, do your due diligence.  A common complaint is that these services may not offer better discounts than employees can get on their own

Recognition

Study after study has proven that there is a very weak correlation between remuneration and an employee’s job satisfaction.    A study from the Saratoga Institute looked at more than 19,000 exit interviews. When they asked the managers or supervisors why their employees had quit, nearly 90% of the supervisors cited reasons related to remuneration. In nine out of ten instances, they believed their employees quit to pursue a job with a larger salary. On the other hand, 88% of employees said clearly that their reasons for leaving had nothing to do with their salary. The data on this issue is pretty cut and dried. In most instances, people choose to leave their current position because of poor leadership from the person they report directly to.  What employees really want, once they feel they are compensated fairly, is to be appreciated personally and professionally by the company and their manager.  They want to be connected to a larger purpose, but they also want their work and contributions to be acknowledged and appreciated, no matter how small.  

Certainly, ensure each of your team members is fairly compensated for the work they are doing, but remember to take the time to truly appreciate what they are contributing and help them to see how it is connected to the larger company goals and purpose.  Take time to call out the traits that are unique and let them know you appreciate them!

Finding the Right Mentor

sherrie suski mentorship

In this blog post, I highlighted the importance of mentorship in your career and professional life. Mentors provide much needed support and direction as you navigate within your network and work to establish yourself as an expert in your industry. The question that always comes up after someone determines that a mentor is the vital key that they are missing is, “How do I find a mentor?” Finding a mentor is not as simple as walking up to someone at a networking event, and asking “Will you be my mentor?”.  Mentoring is about a relationship; it needs to be organic and should grow out of real interactions between people who are already familiar with one another. Here are a few bits of advice to keep in mind when you’re looking for a mentor:

Make Yourself Mentor-Ready

You will not be able to build a successful relationship with a mentor if you don’t know what you want. You need to take the time to reflect, and create a working outline of your needs and professional goals. This doesn’t have to be a list of things that are set in stone, but you do need to know what you want, so you can seek out a mentor who  aligns with your aspirations.

Relatedly, work towards being someone that anyone would want to mentor. Do work to establish yourself as much as possible within your field; know what your strengths and your weaknesses are. Work to associate with the right people, create meaningful work, and be a professional that other professionals want to work with.

Start Networking

As I mentioned earlier, mentoring is born of real relationships. Very few people are willing to invest their time in a stranger. Work to build meaningful connections, both online and in person, and get involved with others through as many different avenues as possible.

  • Get active on twitter, and follow people that you admire. Look at who they  interact with, and follow them too. Read the content that they produce, and maybe even reach out and comment on something they’ve written. Do the same on Linkedin.
  • Go to networking events and make real connections with people. Websites like meetup.com have endless options of meetup groups and events where people are eager to make connections and build up their network as well. Find conferences where people you admire are speaking and don’t be afraid to walk up and start a conversation.

In the beginning, avoid the “I need a mentor”conversation. Instead, work on getting to know these various individuals you’ve brought into your life. Exchange emails, meetup for coffees and lunches, and ask questions. Feel out these interactions, and if over time you think that someone may be a good fit, then ask them if they would be interested in being your mentor. Many believe that the official question will be unnecessary, because the organic relationship that you’re working on will naturally shift into a mentor-mentee relationship on its own. 


For the sources used in this post, and even more resources on the mentorship process, check these sites: Forbes, Fast Company, The Muse

 

Are You Networking Correctly?

networking

 

Every professional should be constantly working to develop their networking skill set. The word “networking” is thrown around in almost every career-oriented workshop or classroom, but many people do not fully understand the benefits of proper networking, and struggle with determining exactly what networking entails. In my line of work, I’m constantly seeing well-networked individuals flourish, because a great network provides great opportunities. These are a few networking tips to follow whether you’re just getting into the game, or a seasoned networking vet looking for a refresher.

 

Practice Makes Perfect

Networking can feel very overwhelming and intimidating to some people. If you’re an introvert, the best thing to do is to practice. Find a few networking groups and start making contacts. Dr. Ivan Misner, Founder and Chief Visionary Officer of Business Network International, says that you should create four different networks of people:

  • Casual Contacts: The individuals you meet by attending mixers and general networking events.
  • Strong Contacts: Business professionals you interact with at industry specific events and groups. (Depending on your industry, you may be able to find groups that gather frequently with the specific goal of creating strong business relationships.)
  • Knowledge Contacts: People you meet through professional associations.
  • Online Contacts: Casual contacts that you connect with online.  (We are in the age of the internet, and your online presence can be the key to your next big career move. Linkedin is currently the most effective online networking site available. )

 

Network Before You Need To

If you’re just getting out of school, be sure to keep in contact with professors, classmates, family friends, etc so that you have a network of people to turn to during the first job hunt. If you’re thinking about changing jobs or industries, start attending events and bulking up your network before you feel like you MUST leave. The one thing that “seasoned” (trustworthy) networkers shy away from are individuals who feel desperate. Try to network with people when you don’t have an alternative motive, so that your interactions come across as genuine.

 

Maintain Your Network

Remember that your network is made up of people. You have to make sure that you build and maintain relationships with the people you connect with. The last thing that you want to do is be the person that only reaches out when you need something.

One great way to maintain your network is to set up a calendar of birthdays and special occasions. Sending a quick text or email on those days will make you stand out as genuine and engaged.  Outside of the special occasions, make sure to send thank you notes, set up coffee dates, or send over articles you think might be of interest.

 

 

There are so many more ways to build and maintain your network. Feel free to check out these additional resources: Business InsiderForbesThe Muse