What’s Keeping Cross-Border Execs Up at Night?

It seems obvious, right? The number one concern for cross-border execs today must be the confusing round of tariffs placed on U.S. imports from Mexico in recent weeks.  

Since February, the U.S.-Mexico tariffs have been on, off, on-again, off-again, partially on-again, and on-again-but-not-as-bad-for-Mexico-as-other-countries. 2025 has been an exhausting year for cross-border shippers, and it’s only April.  

In our talks with cross-border executives, though, it’s not the tariffs themselves that are keeping them awake. It’s the sheer volatility of cross-border trade today. The tariffs are a sign of modern supply chain volatility, but not the cause.  

Let’s face it. Cross-border supply chains have always been characterized by risks, including duties and policy changes — but also currency fluctuations, closed shipping lanes, extreme weather, cargo theft, and geopolitical events. What’s shocking today is the enormous scope of change, as well as its lightning-fast nature. Along with executives around the world, everyday managers of U.S.-Mexico supply chains wake up and brace themselves for the latest news headlines. 

A Shocking Blow to Cross-Border Predictability 

To fully understand cross-border executives’ current level of shock, you must look back at the past. Under the terms of the United States-Mexico-Canada Agreement (USMCA) — signed into law in 2018 and enacted in 2020 — goods have been moving across North America on a duty-free basis for years. The calm, friendly, and predictable trading conditions created by USMCA led Mexico to become the number one trading partner with the U.S., with total trade volumes of  $839.9 billion in 2024. 

Even as recently as January, Mexico was the top U.S. trade partner, with cross-border commerce increasing 7.8% year-over-year in January 2025, to $69.61 billion. 

When U.S. President Donald Trump first announced tariffs on Mexico — in direct violation of USMCA — that peaceful, predictable business landscape disappeared overnight. Executives quickly realized how fragile and vulnerable their cross-border supply chains are.  

Cross-border supply chains had to quickly establish payment mechanisms, obtain internal approvals, set up ACH accounts with U.S. Customs, and execute thousands of new transactions — which literally paralyzed normally smooth cross-border flows. Companies had to replan loads, capacities, and routes to minimize the financial impact of border crossings. Worse, automakers and steel suppliers had to reverse, re-establish, and adjust their business practices multiple times as tariffs were applied, eliminated, and applied again. 

Within just a few short weeks, cross-border supply chains that involve multiple tiers of suppliers, multiple trading partners, and millions of potential customers have been completely upended. 

Supply Chain Volatility: The New Normal 

While Trump claims the tariffs are meant to strengthen American manufacturing, the consensus among industry experts is that they won’t. After all, production facilities and supply chains take years to build and operate, guided by multi-year contracts and commitments. We’re not seeing American companies rush to construct new plants and hire new workers.  

Instead, most companies are taking some version of the “wait and see” approach. Severely affected companies — such as Stellaris — are pausing production and laying off hundreds of workers until the tariff situation stabilizes. The global economic fallout — as well as his own historic waffling — might mean Trump’s tariffs are short-lived in the end. 

So we’re seeing many cross-border executives deciding to absorb the short-term cost of the tariffs or push the cost onto Mexican suppliers or American consumers. Most cross-border execs are cautiously proceeding, without major changes, as the tariff situation still seems dynamic. Are they sleeping well at night? Probably not. 

Partner With Redwood to Future-Proof Your Operations 

The good news is that whatever the next few months bring, cross-border tariffs will eventually stabilize. Hopefully the relative peace and freedom of USMCA will be restored. But, if not, cross-border executives will optimize their supply chains over the longer term to minimize the impact of tariffs — whether that means sourcing more materials from the U.S. to increase their products’ American content or shifting at least some production northward. 

The bad news: Another cross-border supply chain disruption will surely replace the tariffs, whether extreme weather, inflation, or rising crime.  

That’s why cross-border executives should partner with Redwood Mexico to increase their supply chain agility, responsiveness, and resilience. Our expert team — on both sides of the border — has been stepping up masterfully for the past two months, helping customers understand and mitigate the impacts of the tariffs to the greatest extent possible. 

But imagine the much greater strategic benefits your cross-border supply chain could achieve if it were built from the ground up to withstand new tariffs and other shocks. From network design and managed services to advanced technology, Redwood knows exactly how to future-proof cross-border supply chains — driving more predictable results, even in a landscape that’s increasingly unpredictable. 

Redwood experts — including our dedicated cross-border team at Redwood Mexico — are standing by to help you not just navigate today’s tariffs but build a cross-border supply chain that’s designed to withstand these kinds of shocks. Contact Redwood to start future-proofing your supply chain before the next big surprise.