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Are you thinking about producing in Mexico? We say: do it!

25 October 2019

The US and China are at each other's throats in a trade war of unprecedented scale. You might think there are no winners in this situation. Nevertheless, some countries reap the benefits of the conflict between the two superpowers. One such country is Mexico. New industrial areas are being developed all over the country, Het Financieele Dagblad writes. In this article, you can read about what makes Mexico such a great production location.

The high import duties have made exporting products from China to the US less appealing. Many businesses are therefore relocating their activities to Mexico. This low-wage country is located along the southern border of the US. This allows for cheaper and more sustainable transport, among other things. The new USMCA trade agreement also has a positive impact on the production environment in Mexico. According to José Ignacio Martínez, professor of International Relations at UNAM University in Mexico City, the trade agreement opens news doors for Mexico in the US.

Make the move to Mexico

If your sales market is located in North America, producing in Mexico is definitely worth considering. Rompa’s subsidiary ITB has been producing in Mexico for years and has built state-of-the-art, certified facilities for the injection moulding of plastic. Our ITB colleagues in Mexico mainly specialise in injection moulding for the automotive sector. That is good news in light of the new trade agreement, which states that more car components for the North-American market have to be produced in the USMCA trade zone (i.e. the US, Canada and Mexico).

What about China as a production location?

Although producing products in China for export to the US is not as appealing as it used to be and the end of the trade war is nowhere in sight, the country still offers a highly favourable production environment. Just think of the wealth of technological expertise and the extensive supply chain that are available in China's Greater Bay Area. If you want to export your products to Europe or within Asia, you will not have to deal with high import duties. Would you like to know more about why producing in China is a good idea? In our whitepaper, we explain exactly what makes China the perfect production location.

Choosing the right production location

When choosing the best production location for you, there are many factors to consider. Rompa Group can help you decide. You can contact us for advice without any further obligation.