MEXICO - GembahGembah

Manufacturing

MEXICO

The 2nd largest import trading partner and gateway to South American manufacturers

See below for why you should manufacture in Mexico.

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CONSIDERATIONS FOR MEXICO

WHAT TO EXPECT

IMPORTS TO USA

$358B

TRADE

STABILITY

CONVENIENT

PROXIMITY

USMCA Trade Agreement

  • Lower risk in a fast changing world
  • Free trade agreement – lower import tariffs

Cost Competitive

  • Electrical equipment, mid to high-end footwear, textiles, medical equipment, furniture
  • Labor rate 25% lower than China

Fast Turnaround

  • Convenient travel to visit suppliers
  • Rapid prototyping, sampling advantage for product development

STEP-BY-STEP RISK MITIGATION STRATEGY

HOW to Diversify Your MEXICO-Dependency

01

MEXICO-DEPENDENT

All of your sourcing, manufacturing and assembly is completed within Mexico. You are paying approx. 25% import tariffs.

02

Sub-components assembled in new market

All manufacturing is completed within Mexico and the finished components are sent to alternative country for final assembly. Possible to avoid Section 301 import tariffs.

03

High-value manufacturing in new market

Molds and specialty tooling sent to supplier in alternative country for core manufacturing. High volume and low costparts continue to be supplied from Mexico.

04

Full transition to new market

All manufacturing and final assembly is fully transitioned to alternative market. Some sub-components or material may still be sourced from Mexico by your suppliers.

Recommendations for your post-2020 product launch strategy

Gembah’s Predictions for 2021

Sustainable Products

  • Amazon “Climate Pledge Friendly” certification
  • 19 independent certification options
  • Increased consumer demand, increased competitiveness

US-Mexico Trade War Tariffs

  • Slow change expected over coming years
  • Do not delay implementing a smart supply chain strategy

Pandemic Impact: Ecommerce Expansion

  • Surging Ecommerce growth in traditional brick-and-mortar retails
  • Increased opportunity
  • Increased competition