In my last posting, some of you may have wondered why I chose to focus on Mexico. Here is why: Mexico is now America’s biggest trading partner. Not China.
What happened? Geo-political tensions between the U.S. and China have led American companies to look elsewhere to produce their products, and Mexico is looking pretty good right now.
According to an excellent Bloomberg article by Maya Averbuch and Leda Alvim, Mexico’s attraction is not just its export muscle.
Mexico boasts the world’s strongest currency this year and one of the best-performing stock markets.“Mexico’s Moment: The Biggest US Trading Partner Is No Longer China,” Maya Averbuch and Leda Alvim, Bloomberg, September 12, 2023
This is Mexico’s moment. Its geographic location next to the U.S., its labor supply, and its partnering with the U.S. in the North American Free Trade Agreement have made it an ideal manufacturing location.
It all appears overwhelming for Mexico’s business community and resources. Companies are reluctant to invest because the country has a history of boom and bust. The water and electrical supply need to be increased in some areas. Yet, despite the reluctance and shortages, northern Mexico is booming, with Monterey at the center of investment activity.
In Monterrey dust from the diggers is everywhere as new plants spring up. Warehouses are sold before the ceilings and the doors get put in. Industrial space has grown 30% since 2019.The Biggest US Trading Partner Is No Longer China,” Maya Averbuch and Leda Alvim, Bloomberg, September 12, 2023
The Toy Association appears to be ready to integrate Mexico more fully into the North American toy economy. Here is what Steven Pasierb, President of The Toy Association, wrote in response to my article, “Toy Fair – Where are the Mexicans?“
Hi Richard. Retailers from Mexico are on board. A delegation of four people from our partners at Asociación Mexicana de la Industria del Juguete (AMIJU) that The Toy Association works very closely with will be coming to Toy Fair to explore a national pavilion of companies in the next show. With Spielwarenmesse World of Toys, France, China, and India doing national pavilions in 2023, seems like opportunity for growth. Mexico is also poised to expand as an important nearshoring manufacturing resource in the coming years, so hopefully the future is bright.
Good for The Toy Association. These are interesting times.