The new Cold War is a business opportunity, and Mexico looks better placed than almost any other country to seize it.
US-China tensions are rewiring global trade, as the US seeks to reduce supply-chain reliance on geopolitical rivals and also source imports from closer to home. Mexico appeals on both counts—which is one reason it’s just overtaken China as the biggest supplier of goods to the giant customer next door.
On top of resurgent exports, Mexico boasts the world’s strongest currency this year and one of the best-performing stock markets. Foreign direct investment is already up more than 40% in 2023, even before Tesla Inc. starts building a proposed $5 billion factory. Not since the signing of the North American Free Trade Agreement in the 1990s has the country held the kind of allure for investors that it has right now.
I absolutely hate not having our manufacturing in the US. Whether its China or Mexico, all we are doing is trying to find the biggest sucker to offload work because we as Americans like to spend on frivolous shit for cheap prices. This only contributes to wage disparity and us buying more means more GHG emissions.
I wonder, assuming buying habits are essentially unchanged, does this mean emissions are going to go down (shipping is nearby, no more cross-ocean planes or ships), up (more trucking, meaning smaller loads), or will it roughly cancel out?
I work closely with global transportation, and I can tell you with confidence this means GHGs are going up. Theres something called scope 3 emission factors and sea freight is lower than truck exponentially depending on the distance and weight.
I was afraid of that. I’m guessing that any US-Mexico railways aren’t very useful, assuming they actually exist and are maintained.
Almost all freight from Mexico to the US and vice versa gets offloaded at a warehouse on the border and then switched to a different driver/mode of transportation as having a driver eligible to do the whole trip is hard to come by and expensive.
That being said, the rail ramp in Laredo, TX (the crossing point of Nuevo Leon, MX and the US) is active and widely used. Issue is that rail is slow so if your shipment has any urgency, you just use a truck. I use both and while US rail companies suck to work with, they can be very effective cost wise and help keep our total carbon emissions down. But nothing beats a truck in terms of speed and availability in the US…
This is the issue. Americans love cheap, low-quality crap. Yet, we complain about manufacturing being off-loaded overseas. If manufacturing moved back to the US and prices rose because of it, Americans would surely be complaining about “inflation” and blame whomever the President happens to be at the time. There’s no winning.
What does it take for people to realize that the people are the problem? Does God himself need to come down from the heavens to say “stop consuming so much guys” for us to get that we buy too much shit we dont need? Do we need inflation to go higher so we just cant buy anything anything?
We are reaching the limits of how much GHGs we can have on this planet before runaway effects and we stand idly because either ‘muh convenience’ or ‘can’t beat em might as well join em’. I think taking steps to reduce freight and move toward local economies begins with us and our spending decisions but its not limited to that.
If modern US factories were forced to be used in producing these low value consumer goods, it would likely to little to help the issue of wage disparity. We look at an offshore factory with 5000 workers and the assumption is on-shoring that work would result in 5000 on-shore jobs, but it wouldn’t. A modern US factory would be highly automated. Perhaps a couple hundred of workers would be the result. Its not nothing, but its not the 5000 most would assume.
They aren’t suckers. They’re making vastly more money working for US companies, and the US companies benefit too. The products are also less expensive which means more people of all income levels have access to them - hugely important for supply chains, especially.
Comparative advantage helps everyone involved.