Redwood MX Update: First Look at 2025

This Month: New Year Brings Challenges, Opportunities  

Welcome to the first 2025 edition of our monthly blog, the Mexico Market Update. Published at the beginning of every month, this report looks at transportation news in Mexico, key economic and business trends, recent events and new investments in Mexican markets.  

We hope this report keeps you informed on cross-border opportunities and challenges. We’re only a couple of weeks into the new year, and already 2025 promises to provide plenty of both.   

As U.S. President-Elect Donald Trump is inaugurated, we’re getting closer to seeing if he fulfills his pledge to impose a 25% tariff on goods imported from Mexico. In the meantime, Mexico’s President Claudia Sheinbaum announced new incentives for nearshoring, including tax deductions, to further boost trade with the U.S. and Canada. Until 2026, the United States-Mexico-Canada Agreement (USMCA) should ensure that goods can move across North America on a duty-free basis. Any tariffs imposed by Trump before then would violate this agreement.  

One thing is certain. As we publish this report, strong investment in Mexico continues. Since Trump has promised much higher tariffs on goods imported from China, manufacturers around the world are betting that Mexican investments will be more profitable in the long run.

What’s happening economically in Mexico right now? Inflation is at its lowest level since 2021, but the peso remains weak compared to the U.S. dollar, with an exchange rate of $20.63 MXN/USD​. Mexico’s diesel fuel prices remain fairly stable month-over-month, averaging MXN $96.72 per gallon in December. This remains much higher than the U.S. price of diesel fuel. 

As we look toward the new year, cargo theft will certainly remain a challenge in Mexico. Although the Mexican government said its BALAM program has decreased theft by about 9% in targeted regions, overall crime rates are up.   

Freightwaves reports that there were 15,937 cargo theft incidents in Mexico from January through November 2024, a 9% year-over-year increase compared to 2023. In December, the days most prone to theft were Wednesday and Friday, which accounted for 27% and 23% of all robberies. More than half (54%) of thefts occur during the morning. Mexican states with the most robberies were EdoMex, Guanajuato and Veracruz, where 41% of stolen cargo was groceries.

Whatever challenges, opportunities, risks and threats 2025 brings, you can count on Redwood to help you profitably and safely navigate the realities of cross-border trade. The Redwood Mexico team specializes in maximizing the financial return on your trade investments, as well as the ensuring the safety of your cargo and personnel.  

Transportation News and Challenges  

A Look Back at 2024 Trade Volumes 
Mexico was the United States’ top trading partner once again, outperforming China and Canada in two-way trade in 2024. It was the second consecutive year Mexico held that spot. From January through October, U.S.-Mexico trade totaled $706.9 billion, a 5% year-over-year increase compared to the same period in 2023. Mexico should eclipse the $799 billion in two-way trade it achieved with the U.S. in 2023, boosted by exports of gasoline and other fuels, as well as imports of commercial trucks, passenger vehicles and auto parts. 

The Freight Market’s Impending Power Shift 
Despite the prolonged downturn, recent data suggests that the Great Freight Recession is drawing to a close. Key indicators — including rising tender rejections, increasing spot rates and decreasing capacity — foreshadow an impending market shift that will impact both the U.S. and Mexico.  

Violence Is Increasing During Cargo Thefts 
Overhaul, a supply chain visibility firm, reported that 83% of cargo thefts in Mexico during the third quarter of 2024 involved violence, with truckers facing regular hijackings and assaults. Food and beverage shipments were the most targeted, followed by industrial goods and auto parts, with thieves often intercepting trucks while in transit.  

Key Rail Route Opens in Laredo 
Canadian Pacific Kansas City (CPKC) unveiled the new Patrick J. Ottensmeyer International Railway Bridge in December. The 1,150-foot-long bridge spans the Rio Grande between Laredo and the Mexican city of Nuevo Laredo. Built at a cost of $100 million, this is the second international railway connecting Laredo and Nuevo Laredo — and it’s expected to double freight capacity over the Rio Grande.  

Investment Trends 

As we mentioned earlier, foreign investments in Mexico continue to grow, with companies around the world building plants and other infrastructure.  

U.S. air conditioner manufacturer, Lennox, will invest $150 million USD in Coahuila to construct a new production plant. Daimay, a Chinese automaker, will invest $56.2 million to build a facility, also in Coahuila. French aerospace manufacturer Safran will expand in Queretaro, with a new investment of $36.8 million. Doosung Tech, an automaker based in South Korea, will spend $25 million on a new factory in Coahuila. And Emerson, a U.S. technology leader, will invest $22.5 million to build a new plant in Chihuahua. 

Whether your plans include building a facility, investing in cross-border logistics or otherwise capitalizing on strong US-Mexico trade, Redwood has you covered. Learn more about our cross-border and international capabilities, or let’s meet in person to discuss your specific growth objectives and opportunities.