Mexican Government Steps up North American Trade Initiatives

Mexican president Claudia Sheinbaum has announced a new plan to strengthen local industry and trade within the Americas.  

At a press conference earlier this year, Sheinbaum, who took office in October of last year, announced her new Plan Mexico, which includes incentives for nearshoring, including tax deductions, as well as plans to increase the local content of goods made in Mexico. The new proposal is designed to bring more trade within the Americas to Mexico and reduce the amount of goods coming in from China and elsewhere in Asia.

As reported by the Bloomberg news agency, “Sheinbaum said the U.S.-Mexico-Canada trade agreement, known as USMCA, is the best way to compete commercially with China. She expressed confidence that the deal, which is scheduled to be reviewed in 2026, will continue despite the tariff threats by incoming US President Donald Trump.”

“What isn’t made here can be made here. The Plan Mexico was very clear,” Francisco Cervantes, president of the country’s business coordinating council CCE, told Bloomberg. “We have a trade agreement with the U.S. and Canada that the president said is very important, so as long as we stick to the terms of the agreement, things will go well for us.”

Finance minister Rogelio Ramirez de la O said during the event announcing the plan that “If North America replaces 10 percent of the imports we are getting from China, and we make them in North America, Mexico’s GDP would grow 1.2 percent more than it normally does, the U.S. 0.8 percent more and Canada 0.2% percent more.”

Trump has said he wants to impose tariffs of up to 25 percent on Mexico and Canada if those countries don’t help to reduce the crossing of undocumented migrants and curb drug trafficking into the U.S. Sheinbaum said she spoke with Trump about Mexico’s progress against migration and drug trafficking in November and since taking office has initiated a campaign to combat unfair trade from Asian countries, including China.  

As a way to promote nearshoring Sheinbaum’s government is expected to announce tax deductions for local and foreign companies. These deductions, which will be higher for technology, research and development, will remain in place until October 2030.