Impact of a U.S./ Mexico Trade War

Consumers desires are rapidly changing. But one thing is for sure, they want what they want, and they want it now. Speed-to-market is fast becoming crucial to staying alive in this delicate retail landscape, according to the McKinsey 2019 Report on Fashion. The apparel industry has taken the brunt of this shift. Gone are the days of marketing firms and brands deciding what consumers desire.

Mexico made near shoring possible

The speed, or lack thereof, involved in global manufacturing, does not allow for leeway and changes in the production process. The market has become more dynamic than ever before; adaptability of that nature is only accomplished close to home.

In addition to the demand model and speed to market, sustainability and rising labor costs have furthered the desire for nearshoring. Also, the rising wage for factory workers in Asia, compounded by new tariffs has been a catalyst for brands to move production home closer to Mexico.

Tariffs threaten the supply chain

NAFTA and USMCA made Mexico a safe-haven for quality, reliable product that is devoid of tariffs. Now, the U.S government is threatening a trade war with its Southern neighbor, according to The New York Times. Many companies that were planning to move their supply chains to Mexico amid Chinese tariffs are having to rethink their strategies.

If these go into effect, it will have an immediate impact on consumers and businesses alike. Last year, the “United States imported more than $345 billion in goods from Mexico last year, and shipped $265 billion the other way.” These will affect produce first, then cars, until it makes its way onto other industries. Currently, this is merely a threat, but in this delicate trade climate, nothing is guaranteed.

Author:  Christine Duff

Christine wants to live in a world filled with cutting edge fashion, beautiful words and and an endless supply of leather jackets and boots. A product development grad of FIDM, she was the Editor-in-Chief of MODE Magazine where she reignited her love of storytelling. She has diverse experience within the industry with trend research, art direction and styling editorial spreads. She gained her most notable experience working in Los Angeles at the satellite operation for GQ and Vogue Thailand. Christine is passionate about social science and the role it plays in the consumer goods industry and apparel in particular.

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