GENERAL SITUATION IN MEXICO
Weekly Review I May 28, 2025
US - MEXICO PRESIDENTIAL NEWS
United States Delays 50% Tariffs on European Union Imports
Background:
• On May 2025, U.S. President Donald Trump announced the potential implementation of a 50% tariff on a wide spectrum of European Union (EU) imports, targeting key industries such as automotive, industrial machinery, alcoholic beverages, luxury goods, and agrifood products.
• On May 25, following a diplomatic exchange with European Commission President Ursula von der Leyen, the White House agreed to postpone the tariff activation until July 9, 2025, signaling a temporary de-escalation and window for negotiation.
• The measure builds on prior trade disputes and reflects the administration’s protectionist strategy aimed at reshaping trade imbalances and incentivizing domestic production.
• Legacy tariffs on steel (25%) and aluminum (10%) from previous years remain in effect, further compounding the tension.
• The announcement has introduced significant uncertainty for multinational operators, particularly those with complex, transatlantic supply chains or EU-based sourcing dependencies.
Expected Impact on Prices and Consumers:
• The proposed 50% tariffs would result in sharp cost increases across several product categories, particularly European automobiles, spirits, cosmetics, and specialty food items.
• Large U.S. retailers and distributors may experience margin compression or pass on higher costs to consumers, especially for premium and imported segments.
• With global sourcing networks already adjusted due to prior trade frictions, some importers have diversified away from the EU, potentially weakening future trade ties if tariffs materialize.
• Short-term consumer impact may be limited in essential goods but pronounced in discretionary or luxury segments.
• Analysts caution that failure to reach a structural agreement may trigger retaliatory actions by the EU and a new inflationary wave, undermining consumer confidence.
US - MEXICO PRESIDENTIAL NEWS
Effects on Inflation and Economic Growth:
• A full implementation of the tariff package could raise U.S. core inflation by 0.2–0.4 percentage points in H2 2025, placing additional strain on monetary policy.
• Growth projections may be revised downward, with U.S. GDP potentially falling below 1.5% if EU retaliation affects critical U.S. exports (e.g., aircraft, tech, agriculture).
• Financial institutions such as JP Morgan warn that the economic boost from temporary trade leverage may be short-lived, especially in the absence of structural resolution.
• The EU, already burdened by weak growth and energy volatility, faces downside risks— particularly for export-reliant economies such as Germany, France, and Italy.
Impact on the Automotive Industry and Global Supply Chains:
• The European automotive sector stands as the primary target and most vulnerable, with brands like BMW, Mercedes-Benz, Volkswagen, and Stellantis facing significant loss of U.S. market share.
• Tier-1 suppliers and global OEMs operating across both regions may experience disruptions due to logistics reconfiguration, compliance burdens, and increased costs.
• Although many multinationals have moved toward regionalization or nearshoring, strategic reliance on EU precision manufacturing remains.
• U.S. firms with European operations continue to face non-tariff barriers, particularly in areas related to cybersecurity, digital standards, and ESG regulation.
• The semiconductor and green tech industries are strategically excluded from tariff measures, signaling their centrality to national security agendas on both sides of the Atlantic.
SOURCE: FINANCIAL TIMES
LEGISLATIVE CHANGES AND INITIATIVES
LABOR
• INITIATIVE WITH DRAFT DECREE AMENDING SECTION III OF ARTICLE 180; AND ADDING A SECOND PARAGRAPH TO ARTICLE 179 OF THE FEDERAL LABOR LAW
Presented by: Deputy Marcelo De Jesús Torres Cofiño (Plur - PAN) (See actor’s profile)
Purpose: Allows workers aged 15 to 17 who are studying and whose studies are deemed compatible with work by the labor authority to distribute their annual vacation period as needed. Employers are also obligated to allow these workers to take their annual vacation period.
Status: 2025-05-21 – Published in the Parliamentary Gazette
NEWS BY STATE
BAJA CALIFORNIA
INDEX Zona Costa BC will host a major business matchmaking event on July 23–24 in Tijuana to strengthen local supply chains and national content in key manufacturing sectors, including aerospace and medical devices. Over 620 meetings are planned between 50+ buying companies and 220 suppliers, with negotiations expected to exceed $28 million. The event includes one day of business meetings and another of expert panels on industrial policy and economic strategy, including Plan Mexico. INDEX leaders emphasized the need to raise national content in production, currently under 3%, and highlighted their commitment to sustainable regional growth through collaboration with public and private partners.
SOURCE: INDUSTRIAL NEWS BC
NEWS BY STATE
CHIHUAHUA
Ciudad Juarez has been designated as a Development Pole for Wellbeing under Plan Mexico, a federal initiative aimed at boosting economic growth in strategic regions through tax incentives, infrastructure improvements, and investment in key industries. The San Jeronimo Welfare Pole, covering over 60 hectares west of Juarez, will focus on high-value sectors like electromobility, semiconductors, medical devices, and battery production. Its state-owned land offers legal certainty, and its proximity to major transportation hubs enhances its logistical appeal. With a large, skilled labor force and educational programs in robotics and electronics, Juarez is well-positioned to attract advanced industries. Incentives include a reduced 10% income tax, immediate machinery deductions, a continued 8% VAT for qualifying companies, and streamlined permitting processes. Officials highlighted the city’s strategic location and potential for job creation and regional development.
SOURCE: MEXICO NOW
NUEVO LEON
At the 2025 International Foreign Trade Forum, Beatriz Castro of Starr-Camargo Bridge Company highlighted the Starr-Camargo Bridge in Rio Grande, Texas, as one of the most efficient commercial crossings between Mexico and the U.S. Just 232 km from Monterrey, this privately owned international bridge uniquely allows the transit of double-trailer, oversized, and overweight cargo in a single operation—something not permitted on Texas highways. With 15 acres for cargo reorganization before entering the U.S., personalized service, and strong collaboration with U.S. Customs and Border Protection (CBP), the bridge offers a strategic, secure, and cost-effective logistics solution. Complementary services like maneuvering yards, adjacent warehouses, and traffic control enhance its appeal as a key trade route.
SOURCE: MEXICO INDUSTRY
NEWS BY STATE
QUERETARO
COPARMEX Querétaro held a session of the Intermunicipal Socioeconomic Cooperation Table (MICS) to strengthen collaboration between local governments and the business community, focusing on promoting a culture of peace and streamlining administrative procedures. Led by COPARMEX President Beatriz Hernández, the session showcased progress from working groups, including the use of “peace thermometers” to assess social environments and the development of community-based pacification projects. Efforts to harmonize bureaucratic procedures across municipalities aim to simplify processes for citizens and businesses while respecting local contexts. Officials from six municipalities participated, sharing updates and reaffirming their commitment to tangible outcomes, with a progress review set for September and final results expected by year-end.
SOURCE MEXICO INDUSTRY
NEWS BY STATE
CDMX
In May 2025, the Ministry of Economic Development (SEDECO) of Mexico City led an official visit to Japan to enhance commercial, technological, and investment ties. The delegation held strategic meetings with key institutions, including JICA, JBIC, DBJ, METI, and major corporations like Mitsui, Mitsubishi, and Toyota Tsusho. They also participated in international forums such as the LATAM Innovation Forum and Mexican Gala Night. Secretary Manola Zabalza emphasized Japan’s strategic importance, noting it ranks fourth in Foreign Direct Investment (FDI) in Mexico City, contributing over $726.6 million in 2024 to sectors like manufacturing, technology, and financial services. Over 1,100 Japanese companies already operate in Mexico. The visit also marked the involvement of the city’s Investment Agency (InCDMX), underscoring efforts to promote Mexico City’s infrastructure, economic stability, and transition to a digital, sustainable economy. The initiative aims to position the capital as a global hub for healthcare, biotechnology, innovation, and sustainability.
SOURCE: MEXICO INDUSTRY
STATE OF MEXICO
Tetra Pak inaugurated its first and only manufacturing center in Latin America in Cuautitlán Izcalli, State of Mexico, with a €10 million investment. The facility will produce 87 pieces of high-tech food processing equipment annually, such as pasteurizers and dosing systems, with 50% destined for export across the continent. The plant strengthens Mexico’s industrial capabilities by integrating 42% local suppliers and generating 70 direct and 100 indirect jobs. Officials, including Swedish Ambassador Gunnar Alden and State Secretary Laura González, praised the project’s role in fostering industrial modernization, local talent development, and international collaboration. Tetra Pak CEO Ramiro Ortiz highlighted the company’s commitment to regional markets and the symbolic significance of manufacturing high-tech equipment in Mexico. The initiative further strengthens economic ties between Sweden and Mexico, positioning the State of Mexico as a strategic hub in food technology and manufacturing for the region. The project also supports local SMEs through supply chain integration.
SOURCE: MEXICO INDUSTRY
INVESTMENT NEWS
CENTRAL MEXICO
TAJCO
Automotive company TAJCO has selected Querétaro as the location for its new plant in North America. With an initial investment of nearly 10 million dollars, the company plans to create over 270 highly specialized direct jobs as part of its expansion strategy into the U.S. and Latin American markets.
ARCA CONTINENTAL
With an investment of 72.8 million pesos, Arca Continental —one of Coca-Cola’s main bottlers— has inaugurated a new Distribution Center (CEDI) in the municipality of Tonalá, Jalisco. This project is expected to generate up to 1,200 direct and indirect jobs in the state.
MALASA
Spanish company Grupo Malasa, specialized in furniture manufacturing, will double its production capacity in Querétaro through an expansion project that includes the creation of 200 new jobs. This growth initiative is driven by sustained demand for its services across the retail, hospitality, and residential sectors, with a strong focus on export markets, particularly the United States.
NHK SPRING MEXICO
NHK Spring Mexico inaugurated its new Motor Core Plant in Irapuato’s Castro del Río Technoindustrial Park, with Governor Libia Dennise García Muñoz Ledo leading the ceremony. The $55 million investment will create 233 jobs and enhance the company’s
production of engine cores for electric and hybrid vehicles. This expansion, next to its existing facility, reflects growing Japanese confidence in Guanajuato and contributes to the $105 million in investments secured during the governor’s recent Japan tour.
NATIONAL
BBVA
BBVA announced a new investment of over 5 billion dollars in Mexico, to be executed through 2030. The initiative reflects the bank’s confidence in the country’s economic outlook and aims to support the expansion of its operations, digital infrastructure, and financial services across the region.
SOURCES: MEXICO INDUSTRY, EL ECONOMISTA, MEXICO NOW
PRODENSA INSIGHTS
UNLOCKING THE POTENTIAL OF NORTH AMERICAN TALENT
As nearshoring accelerates, access to skilled talent across borders is becoming a decisive advantage for manufacturers in North America. This blog explores how aligning regional labor strategies—especially between the U.S., Mexico, and Canada—can help businesses overcome workforce shortages, reduce turnover, and drive operational success. From STEM education pipelines to integrated HR models, discover how forward-thinking companies are reshaping workforce mobility and competitiveness in the region.
WHY NEARSHORING TO MEXICO IS A SMART MOVE
Mexico is emerging as a strategic hub for global manufacturers rethinking their supply chains. This blog breaks down the economic, geographic, and regulatory advantages of nearshoring to Mexico—including reduced lead times, skilled labor, and preferential trade access under USMCA. For companies looking to boost resilience and cost efficiency, Mexico offers a compelling path forward.