Make Mexico the New China?

[Phaseolus]

Here’s an idea I’v been thinking on while being locked down. We’ll all probably agree that we need to distance ourselves economically from China. Thing is, i don’t see the US ever producing the low value items and maybe even some of the electronics. Why not help Mexico get into the niche China is occupying? If they had more jobs they might stay home and they could produce low cost stuff in North America. Flame on.

 

[Billinsd]

Good idea. I'll add in India, Pakistan, Vietnam, etc. Better to spread out our demand to countries that aren't so dangerous and hostile to us.

 

[ZDR]

I manage outsourced mfg for a major company and most of our operations are in Taiwan, S Korea, Vietnam, Malaysia, Thailand etc...we have some in China and have been shifting out of there due to the tariff war last year. Problem is many of the non-China companies are still owned by China (exceptions are Taiwan/S Korea). These same companies have factories in Mexico too. I do think your idea is viable as is eastern European countries. But, pharma, high end chems, rare metal mining & processing etc need to come home...

 

[nam1975]

This happened one already as NAFTA started... quick stop in Mexico for a few years and then on to China. (At least in the wiring, cords and harness world)

Walmart opened the floodgates for consumer goods to China.

You’d be shocked at the freight costs on a boat for some stuff that you think would be easier to produce domestic?

But I’m no global economist.

 

[Nickofthewoods]

I would be much more supportive of U.S. based Companies sourcing from Mexico rather than China.

 

[Poser]

Would likely take a considerable upfront investment to get Mexican facilities up to technological speed to compete with Chinese plants. And it’s still an unknown in terms of production outcome plus China’s gov’t would likely be willing to subsidize their production and manufacturing upgrades just to further outcompete emerging countries. You’d also have to ask the question is tech based, global manufacturing on the Chinese scale a desire that Mexican culture even has? I don’t know if the people of any country want to be China or anything like China.

It’s a nice thought, but unless we can go back to the mid 70s and make some retroactive adjustments, not sure it can be done in a way that has a competitive outcome.

 

[Travis Hobbs]

I agree! We should cut off China and invest in Mexico. The only thing I see standing in the way is corruption in Mexican government, I do think, if properly done it’s very feasible and doable.

I think China needs the US more than we need china.

 

[tdot]

A friends family owns several factories in Mexico. They produced in China prior to that and only stopped when the Chinese factory stole their designs and started selling out the back door. Despite that, they miss operating in China. The Gov't, access to capital, work ethic, infrastructure and supply chain were all superior in China. Not to mention not having to deal with the Cartels.

 

[Okhotnik]

A friends family owns several factories in Mexico. They produced in China prior to that and only stopped when the Chinese factory stole their designs and started selling out the back door. Despite that, they miss operating in China. The Gov't, access to capital, work ethic, infrastructure and supply chain were all superior in China. Not to mention not having to deal with the Cartels.

Yep, people are quick to forget that Mexico is run by violent and murderous cartels.

Cartels vs Communist Chinese ? both groups murder, rape, torture thousands of innocent people a year. And they steal everything. Thats a Faustian dilemma

Maybe best to try and get more manufacturing back to the US.

 

[*zap*]

Mexico had its credit raring adjusted yesterday, now it is one notch above a pile of dog poo...

MEXICO CITY (Reuters) - Fitch Ratings on Wednesday downgraded Mexico’s sovereign rating to one notch above speculative grade on fears that the economic shock caused by the novel coronavirus will cause a “severe recession” in Latin America’s second-largest economy this year.

Fitch cuts Mexico rating to one notch above 'junk'

Fitch Ratings on Wednesday downgraded Mexico's sovereign rating to one notch above speculative grade on fears that the economic shock caused by the novel coronavirus will cause a "severe recession" in Latin America's second-largest economy this year.

www.reuters.com

 

[Shrek]

Much of the offshored manufacturing will never come back but all of it can be moved out of China and should be. Mexico has its problems for sure but there’s plenty of options if corporate America is forced to use those options.

 

[16Bore]

Hmmm, let’s see. We have droves of people coming here for opportunity and we need shit.

The demand is for cheap and plentiful labor.

Well, the best resource for that is an overpopulated communist country.

Modern slavery.

Mexico might not excel in working like slaves, but they sure as hell know what freedom looks like.

Then there’s the drugs.

 

[roosiebull]

if we have to have something produced overseas for cheap, do we really need it?

I would rather use this scenario in a cultural shift of sorts, we don't all need a house full of worthless stuff that doesn't last that we bough because it was cheap.

 

[16Bore]

if we have to have something produced overseas for cheap, do we really need it?

I would rather use this scenario in a cultural shift of sorts, we don't all need a house full of worthless stuff that doesn't last that we bough because it was cheap.

There’s demand and the avenue to fulfill it.

Look at the classifieds here and all the “I need a new.....” threads. My bow from 3 years ago is old and no good, I need a new one. 30-06 is old and boring so I need a 300WSM. The coat I wore last year doesn’t work with my system of instagram perfection. Oh, but wait. This is a “brand X” and it’s the BEST. At least until next year.

Case and point.

 

[vanish]

As long as we have unregulated capitalism, corporations will produce where it is cheapest to do so. Corporations are beholden to their shareholders, and thus their bottom lines, not national interests.

 

[Chaseoz341]

Yes....no sense in not helping the economy closest to us. Plus great hunting is sonora!!

 

[Middleofnowhere]

Mexico and Canada were cheating big time with the old NAFTA deal. Mexico and Canada would import cheaper components from China and then sell it in the USA. So your autoparts, etc. that said Made in Canada or Hecho en Mexico were actually Made in China.

The new USMCA deal will be slightly better than the old NAFTA, in that it will put restrictions on Chinese content of goods coming from Mexico and Canada. Long term, you will start to see the benefits of this deal.

One of the barriers US companies have had to manufacturing in Mexico and Central America has been corruption and crime. It is almost impossible for a multinational to build a factory say in Guatamala. The corruption is incredible. A buddy of mine wanted to manufacture someplace other than China, it has been almost impossible for him to make anything happen south of our border.

 

[16Bore]

As long as we have unregulated capitalism, corporations will produce where it is cheapest to do so. Corporations are beholden to their shareholders, and thus their bottom lines, not national interests.

 

[ODB]

As long as we have unregulated capitalism, corporations will produce where it is cheapest to do so. Corporations are beholden to their shareholders, and thus their bottom lines, not national interests.

Id be willing to bet you are equally as concerned about your bottom line as well, and not the national interests.

But don’t misconstrue that comment to mean
Something it doesn’t.

 

[ZDR]

Yep, people are quick to forget that Mexico is run by violent and murderous cartels.

Cartels vs Communist Chinese ? both groups murder, rape, torture thousands of innocent people a year. And they steal everything. Thats a Faustian dilemma

Maybe best to try and get more manufacturing back to the US.

Make no mistake, China is a brutal regime with little regard for their own people. There is no freedom of expression, religion, thought or even movement. As a frequent traveler there for work, I know every move I make is tracked, there are cameras with facial recognition everywhere. My drivers are most likely informants. 2 things I would encourage everyone to do: 1. Understand what the 'China 2025 initiative really is. 2. search human rights violations in China. And take the time to read about companies like Quanta Shanghai MFG City - 80000 employees who live on site. QSMC is one of the better companies because they mainly build products for US companies which comes with certain oversight. Despite that, they have a long litany of workforce abuses.