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    Redwood MX Update: March 2025

     

    This Month: U.S. Tariff Dance Creates Cross-Border Uncertainty

    Welcome to the March edition of Redwood’s Mexico Market Update! Redwood’s cross-border specialists created this report to keep you informed about key economic and business trends in Mexico, transportation news and challenges, and new investors in Mexican markets over the preceding weeks. 

    We’re only three months into 2025, and already this year has provided many discussion points.  

    Of course, the single biggest topic continues to be the on-again, off-again tariffs on Mexican goods imported into the U.S. A 25% tariff was announced effective Tuesday, February 4 — but then U.S. President Donald Trump paused it for 30 days. On March 4, Trump reinstated the 25% tariff, but then quickly rolled it back again. On March 5, the tariff was eliminated for automakers — and on March 6 for all products covered under the United States-Mexico-Canada Agreement (USMCA). 

    However, on March 12, a new 25% tariff was announced for all imported steel and aluminum coming into the U.S. — and on March 27, Trump placed a 25% tariff on all imported autos. More recently, Mexico was largely spared from the aggressive global import tariffs rolled out on April 2, which Trump called “Liberation Day.”  

    The natural result of this two-month tariff dance is caution on the part of many companies engaged in cross-border trade. While agricultural products continue to seamlessly cross the border, Stellantis has already paused production at one Mexican plant in light of Trump’s new tariffs. Meanwhile, Mexican President Claudia Sheinbaum hopes to drive manufacturing growth via Plan Mexico, an initiative to promote and cultivate more domestic production.  

    Amid this chaos, diesel fuel prices remain fairly stable in Mexico, at 98.17 MXN/gallon. However, the Mexican peso continues to weaken, hitting a five-week low of 20.68 MXN/USD​. ​ 

    Cargo theft is also a problem, growing 22% year-over-year from February 2024 to February 2025. This growth is expected to continue, and theft is becoming more organized. The Associated Press reports that, in 2024, one in eight members of the American Chamber of Commerce in Mexico stated that organized crime had “taken partial control of sales, distribution and/or pricing of their goods.”  

    The days most prone to cargo theft in February were Tuesday and Friday,  accounting for 32% and 21% of all crimes, respectively. More than half (53%) of burglaries occurred during the morning. The Mexican states with the most robberies were EdoMex, Puebla, and Veracruz, where 36% of stolen cargo was general freight. 

    How can companies engaging in cross-border logistics mitigate the uncertainty caused by shifting U.S.-Mexico tariff policies — as well as rising crime rates? One  low-risk, high-reward strategy is contacting Redwood’s cross-border team of experts for custom-tailored guidance. 

     

    Transportation News and Challenges 

     
    U.S. trade with Canada, Mexico hits $134 billion in January  

    Despite ongoing global trade turmoil, U.S. trade with Canada and Mexico rose a combined 8% year-over-year in January, reaching to $133.4 billion. Mexico was the top U.S. trade partner in January, with cross-border commerce increasing 7.8% year-over-year to $69.61 billion. 

     
    Auto industry braces for tariff impacts 

    As already noted, Stellantis has paused production at a Mexico production plant —and it’s also laying off hundreds of workers across North America. In the case of vehicles coming from Mexico and Canada that comply with USMCA rules, tariffs will apply only to non-US made content. Still, the impacts are devastating for cross-border auto trade. Mexico is America’s leading source of imported automobiles, with 2.9 million finished vehicles shipped last year, valued at $78.5 billion. When automotive engines and parts are included, that figure exceeds $182 billion, according to the U.S. Department of Commerce. Automotive products account for nearly a third of Mexico’s yearly shipments to the U.S. 

     

    Investment Trends 

    Even as tariff uncertainty reigns, foreign investment in Mexico continues, as companies around the world recognize the benefits of Mexican manufacturing. Here’s a summary of recent investments. 

    Mercado Libre, an e-commerce company based in Uruguay, will invest $3.4 billion USD in Mexico to strengthen its technological and financial ecosystem — including a $180 million USD plant in Nuevo Leon. U.S. retailer Walmart will invest $123 million USD building new production facilities in Tamaulipas. South Korean tech company LG Electronics will invest in a $100 million expansion in Tamaulipas. And Chinese motorcycle manufacturer Yadea will invest $80 million USD in State of Mexico for a new plant.  

    Like you, our team at Redwood is also concerned about the volatility of U.S.-Mexico trade. But we’re the right modern 4PL partner to help balance the impacts of new tariffs by reducing total transportation and distribution costs, leveraging technology for supply chain optimization, and driving shorter cash-to-cash cycles.  

    Learn more about Redwood’s cross-border and international capabilities, or let’s talk one-on-one about your goals and opportunities in Mexico today.