Mexico has always been the obvious and logical place to “offshore” your manufacturing, for reasons of geographical and cultural closeness.
It didn’t happen, simply due to security threats and corruption. You can’t manufacture there if your execs are being kidnapped and your trucks are being hijacked (and you’re being squeezed for money for the party).
So a lot of the manufacturers who were first to go in there shifted to China. If they are going back to Mexico, it must mean that security has become less of an issue. That surprises me, with the veritable mafia war up on the border.
Maybe someone here at FR can comment; has security improved in the last few years there? That isn’t my impression from press reports at least.
Wages in China are going up to the point where other places are more economical, and Mexico can gain, especially considering Mexico’s proximity to the US and sharing timezones with us.
Good, on several counts.
First, we should WANT to have our neighbors be prosperous, and this would help a lot.
Second, if Mexico is prosperous, less of them will come here - which is really what anyone normal would want. Who WANTS to leave the land of your birth, all other things being roughly equal? This would help it come closer to being roughly equal.
Third, more prosperity in Mexico makes it less likely that it will go more Socialist, let alone full Commie like Cuba. More of them will say "I built it" and give the finger to those saying otherwise.
Finally, it'll take money out of the hands of the Red Chinese. They have NEVER been our friend, and every day that passes reinforces this point. Manufacturing needs to be diversified anyway, and even if we had perfect relations with China it would still be in our interest to have yet another source for manufactured goods (though I'd like a lot more to be located within our own borders, but that's a whole other issue).
This is unadulterated good news.
A lot of companies that left the US for Mexico when NAFTA started....ended up going to Communist China.
Commie China is not the cheap labor place anymore. Its population is starting to decline
Mexico is not much of an option. The Mexican Drug Cartels run most of the Mexican states, and, Mexican population is now at the threshold of declining...its birthrate dropped to less than replacement (less than 1.7 children per woman)
The days of Liberal Free Trade Globalism are over. There is nowhere to run for cheap labor