Chris:

Welcome everyone. Thanks for joining our webinar today. We're about to get started, and it'll be about two minutes before we kick this off, but thanks to everyone who's joined so far. I might sound like I'm on repeat, but I can see we're getting a lot of folks joining. We're getting started at about one minute everyone, so thanks for jumping on. Okay, everybody. We're still getting a lot of people to join, but we're gonna get started just to make sure that we get everyone we get through all the content that we're trying to get through in, in the timely fashion. So, hello everybody, and welcome to today's webinar “Breaking Barriers: US-Mexico trade in a  shifting landscape”. I'm Christopher Schafer, the president of Import Genius, and I'm gonna be your moderator for today's session. We're kicking off at a time of significant change in this trade environment.

On February 1st, president Trump signed an executive order imposing 25% tariffs on products for Mexico on Monday. He stated they're gonna go forward when a month long delay of their implementation expires next week with reciprocal tariffs going into effect on April 2nd. This news highlights the volatility and uncertainty we're facing even through the tariffs. Sorry, even though the tariffs are on hold for now, the underlying tensions remain and businesses must be ready for, you know, any potential future change. Our discussion today is about understanding these shifts, not just as headlines, but as real factors that affect your supply chains, logistics and strategic planning. We're gonna explore how data-driven insights from Mexico border trade is gonna help you navigate these challenges, mitigate risks, and sees new opportunities in the world's busiest trade corridor. In terms of how this webinar is gonna flow, we're gonna start off with a panel of discussion, and then we're gonna leave time for everyone's questions at the end, so, or whatever questions we can get through, so please get those into the chat and, and, and we're gonna address as many as we can as we wrap up.  Before we get started, I wanna extend Lori Ann's sincere apology for not being able to be here. Most people probably saw the updates, but as a senior reporter at C-N-B-C covering this topic right now, it's, she was pulled into some urgent story and we're hoping to have her on one of our next tariff webinars here in the next coming, next couple of months. So we're gonna hopefully get her back on. That being said, we have got an incredible panel today, okay. Experts that have been covering these issues and advising business on how to adapt today and now. So they're gonna share their perspectives, actionable strategies, and how to stay ahead of this ever-changing landscape. With that being said, I'd like to invite both William and Alejandro to introduce themselves and then we're gonna get started. So, Alejandro, I'll get you to start, please.

Alejandro:

Thank you. Well, first of all, thank you very much for the invitation to participate in this very timely webinar about what's going on in terms of the US Mexico relationship. Well, my name is Alejandro Ramos. I'm the executive director of the US Mexico Chamber of Commerce. I am based in New York. The US Mexico Chamber of Commerce is a nonprofit, non governmental organization that's, it's been in existence for more than 100 years. It has its origins here in New York with the Mexican Chamber of Commerce in the United States, and later on it merged with the US Mexico Chamber of Commerce to become the, the Northeast Chapter. Our mission is to promote and facilitate business between Mexico and the US inbound/outbound from traditional trade, but also we cover areas of financial services, professional services, et cetera. And well, again, very, very glad to, to be here.

Chris:

I really appreciate you, you being here today. Thank you very much. William, please go ahead.

William:

Hey there, thanks for having me today. So my name is William George. I'm head of research here at Import Genius, and I've been with the company since 2018, which is a relevant date here because that was the beginning of the first Trump trade war, the section 301 tariffs. So it's fascinating to be here for round two and take the insights that I've developed over the past six years and, and honed and share them with you today.

Chris:

Excellent. Well, thank you. With that being said, everybody, let's jump right into this. We have a limited amount of time, and I'd love to get started on this. So, William, you know, let's just stay with you and, and I want to kick off with you contributed to the C-N-B-C article, the one that was how Trump's tariffs on Mexico and Canada will sweep across. I'm just gonna review my notes across the US state by state, and that was just Tuesday, right? So can you expand on what this means? I, I think this is, it couldn't be more relevant than right now, so please give us some perspective. Yeah,      

William:

Yeah. Thanks Chris. So, obviously this is a rapidly developing story, but for that article we worked with CNBC and LendingTree to analyze US imports from Canada, China, and Mexico on a state by state basis at the six digit HS code level. I really recommend that people take a look at that article. It's got detailed stats if you want those written by Lori Ann, who unfortunately can't be here today, but is one of the best reporters on the topic. But let me give you the main takeaways. So unsurprisingly, Boyle Auto and Technology, those sectors, they dominate by dollar values and we know that, and we know that if these tariffs, these tariffs on, on Mexico and Canada, not the initial Chinese tariffs, which are already in play and maybe about to double if these go live, there will be pain. But the thing to focus on here is that these are our top three trading partners, right?

William:

So it isn't just about the big industries. There's gonna be price increases from everything from strawberries to medical instruments. So every grocery store shelf, every used car dealership, even your health insurance premiums, those might all start to rise and you'd be pretty hard pressed to find any company involved in manufacturing in the US whose supply chains won't be impacted. So for example, there's a company called Burn. They're a Michigan based electronics manufacturer, and just this week their VP of sales had to send out an email saying that despite their really hard work to keep their supply chains as domestic as possible, because of the 10% China tariffs, they're having to raise prices one to 4% on certain product lines that contain components they couldn't source domestically. So the other side of this too is that it's not just the import value of the goods. Like if we look at Mexico specifically, Michigan receives $50 billion a year in auto parts and, and and cars for their, their auto industry. And that goes on to support roughly 300 billion of the state's GDP. So these inputs can have really, really large impacts on broader state economies.      

Chris:

That's great perspective. Let's, let's move into the, the tariffs and trade policy. And Alejandro, let's move over to you and, and from your work, what are businesses most concerned about and, you know, what strategies are, are they using to mitigate risk right now? I think that's the underlying question I have right out of the gates on the tariff piece for you.

Alejandro:

Yeah, I think that, well, it basically depends on the profile of the companies because, well, when you talk about trade between Mexico and the, and the US it could be in many ways, in some cases it's just final products. If you are talking about products in the agri business industry, well you, you're gonna be importing strawberries or blueberries or avocados. At the same time you have the other side of the equation, US companies exporting to Mexico corn and other soybeans and other, and, and other products. In those cases, it's, I would say relatively simple to understand that the potential immediate effect of, of, of at tariff. And there is not much to do in the, in, in the short term, but basically to look for price to, for, for pricing in other countries and in other, in other latitudes and considering transport, et cetera, et cetera.

But at the end of the day, the, the strategy just as William was mentioning, could be just to increase prices. There is not, not not much to do in the, in the, in the very short term . But in the other side of the spectrum, you have a, a lot, a lot of companies that produce together between Mexico, the US and even even Canada, of course, while the, the, the most great example is the auto industry, in which world you may be importing from Mexico, a final, a car or a truck. But before that, there were a lot of pieces, a lot of parts that were crossing the, the border, both sides. It could be brakes from Mexico coming to the, to the US part of the computers of the, of the, of the car from the US to, to Mexico. So on average, it's the parts of a, of a, for an automobile across, across the border, eight times at least, at least.

So for a company like that to see this, these stories are how to react is it's very complex. It is not that you can just unwind the whole supply chain and then have a manufacturing of the whole thing in the US or coming from from other countries. That is something that takes a lot of time. So what's in, in a lot of cases, what's the strategy? Well, you have to think medium and, and long term to really explore what's gonna be the, the outlook in the long, long term of these studies, if they're gonna be permanent, if they're gonna be just temporary and depend on, depending on that is the, the reaction that the company, that the company may, may have. In other cases, the, the, the strategy for companies that, let's say that they are planning to invest in plans in, in Mexico or something like that, is where I see, because again, we don't know if it's gonna be something permanent or temporary. So companies, they are just waiting to see what is gonna happen and then they will be making their, their investment decisions about establishing a, a plant ..

Chris:

Yeah…

Alejandro:

A plant in Mexico. So all in all, it's the, the, with all the uncertainty that that, that you see, there are not the solutions in the, in the, in the very, very short term that the companies can do. I, I, I've been hearing the cases of companies in the electronic industry that the one day before the, the, the, the first, the first potential date of the tar, what was gonna happen a month ago, they basically in one day look for, to lease, say warehouses, spacing in Texas, and they exported the, all the production that they, they they already had in, in, in Mexico to the, to the US just to be safe and to try to avoid the, the tariff. But that avoidance is gonna be for one or two days. It's not gonna be a, a, a long, a long term solution.

Chris:

No, makes sense. Highly reactive. No, it's can just staying with this, can we stay, let's, let's put this in context. How, how the US trade relationship compares to the US' other major, you know, relationships as, or countries as far as trade goes, like, let's just put it in context so everybody understands.

Alejandro:

Well, you, you could, you should analyze this from different, different perspectives. One is what is the, also the, the long term goal of the, of the US. If that goal is  reduced deficit, reduce the dependence on, in this case, for example, China, because all the reports that you are having from them, especially in certain areas that imply some national security issues. Well, the, the, the possibility of working with the, with your allies, it's, it's significant. So that's why the, the, the relationship between Mexico and the US and Canada is really, really important for the US. If the region wants to be really competitive and really support this, this disengagement of the, with, with, with, with, from Chinese products, from Chinese supply chains, well you, you have to work, you have to work locally. And guess what, Mexican, the US are neighbors and none of them are planning to move. So here we are to here we are to stay. So it would be better and companies have been doing this for not, just since the beginning of, of NATA so many years is working together to take, to take advantage of the, well, the competitive advantages of each of, of each country and, and, and build together North American products.

Chris:

Yeah, great points. William, you know, you mentioned, you know, you started your trade research with a, in 2018, right? So how did trade data help you drive actionable insights as you worked on reports and, and, and you know, what, do you see the same big thing being possible in this next round? Like as far as trade analysis goes?

William:

Yeah, so that was a wild time to start doing this work. And honestly, the only wilder time since has been right now. So our research team put together an in-depth analysis of front-loading activity, front-load, front-loading being when retailers or anybody, they, they bring in large amounts of goods and warehouse them so that they can get them into the country before tariffs hit and then buy themselves some financial runway to sort of deal with the problem later. So yeah, we were looking at front-loading activity by major retailers and we were able to see how Walmart, Target, Amazon, et cetera, how their behavior and their import volumes correlated to rumors, deadlines, and tariff impositions with US import records, updating daily and Mexican records, updating monthly. If you know the signals you're looking at, you can basically spot this happening in real time. And this is super valuable if you're one of the suppliers for these people, you're trying to forecast their demand.          

Maybe you're in logistics and you're interested in handling shipments for companies that may be engaging in front loading, and especially as we have further rounds of tariffs, we could see additional front-loading activity. Or maybe you're an investor and you're trying to use shipping activity to predict sales estimates ahead of earnings calls. So we're absolutely already seeing visible signals of behavior like this right now. So two smaller companies whose imports really popped in the lead up to the China tariff in positions were Columbia Sportswear and Yeti. And you can see this happening in the solar and in the data center industries as well. Now, another kind of activity that this data allows you to model clearly is where major companies are shifting their manufacturing to. So nearshoring is clear, that's especially visible in the Mexico data, but you can also see how Vietnam and Thailand have been major winners in the push to divest from China. And if you're a manufacturer interested in doing this, this data is a great way to identify potential factory partners and operators and also keep a, a sense of where your competitors supply chains are moving to. So yeah, absolutely.

Chris:

Great point.

William:

This is just as doable now as it was last time.  

Chris:

Yeah. Excellent. Excellent. Alejandro, I over to you again. So Mexican average tariffs on US goods is 7% while under the USMCA, so most goods are exempt from tariffs. With new tariffs coming into play, how is this gonna impact this or is it gonna impact it?      

Alejandro:

Well, first of all, that 7% could be according to, to two, but in practice, the, the, the tariff is zero because you are a within the, within the USMCA. So basically I would say all the products are exempt from, from, from tariffs. If the USMCA goes away, then you will have to manage that, that other tariffs that are according to the, to the WTO. But we don't see that as a, as a short term scenario. Then which products are, or industries are gonna be more, more impacted with this potential 25% tariffs. Of course, those that are, that are the most important proportion of exports from Mexico to the US you have to of course consider the automotive industry. I think that that would be the number one. But also some manufacturing products, well, it was already mentioned medical devices. Mexico is a significant export of medical devices to the, to the US eh, but also approach in the agribusiness sector, eh, that all the, the, the US imports several of them from, from Mexico.

But again, that an impact of something like that is gonna be in, in the short term because, well, some weeks later you will see this reciprocal tariffs imposed to other countries. And if for example, you have the option of importing some agricultural approach from Mexico or from Costa Rica, well probably you will be facing similar, similar ties from, from both countries. I couldn't be really concerned about this 25% in general for all Mexican products because that is responding more to, I could say, to other, to other areas related to security, immigration, et cetera, et cetera. So the real concern should be on those targets that may respond to economic issues. And those are the ones that the, the department of Commerce here in the, in the US has mentioned that while they are utilizing them and that those are the ones that should be the real concern for, for, for, for companies. Because in those cases, most likely they're gonna be just in a specific industry in a specific products and they may have a longer term, longer term effect. Something also important to mention is that any tariff is against the, the, the USMCA. So that may create a significant tensions about the, the, the, the, the relationship, some potential retaliation from, from Mexico or from Canada that is in the medium long term is not gonna be good for, for anybody. And that may even benefit some, some other countries that are competing with the us.      

Chris:

That's great points. You touched on some of the industries that are gonna, yeah, if these are fully enforced, some of the industries that are gonna be really impacted. William, I want your opinion on this too, from the data standpoint, but Alejandro, is there anybody, any other industries that should really be thinking about this before I get William's opinion on this as well?

Alejandro:

Yeah, I think that the, the, the easiest way to check about this industries is precisely analyzing the, the data that, that William is gonna be discussing because it's very easy to see, well what are the, the, the products, the, the, the industries that they may have a, a more significant impact, but it could be, I don't know, big appliances, Mexico, export dryers, washers to the, to the US and they are not products that can be easily substitute for products coming from, from Asia because just the, the shipping, the, the logistics, it is, it's, it's quite expensive. And even the, the TVs, TVs, Mexico export a lot of TVs to the, to the us Mexico is one of the largest producers of, of, of TVs. Same thing. You, it could be really difficult to substitute them from products from, from other, from other regions. And yes, well they, they are gonna be certain and impacted by if this startup go.

Chris:

Excellent. Thank you. William, can you jump on that as well, please?      

William:

Yes, we've talked about the major categories here, but you know, auto and, and things like that. But something I really think we should keep an eye out for is that we bring in about a hundred billion dollars a year in crude from Canada and another 12 or so from Mexico. So a 25% tariff on that while it will, you know, contribute a lot in taxes to the US that's gonna come with the cost of increasing people's prices at the pump and not just, you know, individual consumers. But that's gonna drive logistics prices up because even a small fluctuation in gas prices for, for trucking, for air freight, that can have significant impacts on company budgets. And these can really stretch these budgets uncomfortably if people don't have scenarios planned, which might account for that. And logistics costs in general are likely to go up as well. If these recent proposed fees for ocean freight carriers that operate Chinese vessels as part of their fleets are implemented, we've seen how significant spot rates and logistics costs can be as an inflationary driver and we do know that these price increases inevitably get passed on to the consumer.    

Chris:

That's great points. Let's move into the sup supply channel logistic impacts right now if we just stay on that. So Alejandro, do you see, do you foresee a problem with demand happening as a result of this, this at all right now?

Alejandro:

I think that, well the, the, the challenges will come both sides from the supply side on, on the, on the demand side. Again, there, there are products that are gonna be difficult to basically stop importing them and then produce them here in the, in the, in the US so the, the impact in terms of logistic, logistic services is not, not, not necessarily going to change we could change because of changes in in demand. It is gonna definitely depend on, depend on the, on the adjustment and what happens with, in terms of the relation of the US with other, with other countries regarding, regarding Paris, because again, in the short term, you cannot sub substitute immediately those, those products, you will, will, you will keep importing. But if companies start, start seeing this as a long term situation, and then of course you will start seeing more potential evaluation about investment grants here in the US as opposed as in Mexico or, or any other, any other areas.              

But that, that is something that is gonna, is gonna take time. Something that is also important to consider is what is gonna be the fact on the, on the FX rate. Because you may say, okay, well let's say let's have a, a, a general tariff of 10% of Mexican product just to say something because I don't think there is gonna be well across, if there is a, if the peso loses value in 10%, at the end of the day, the price is gonna be more or less the same. If you have the opportunity to buy cheaper in other country, well you, you may look at that, but if again you have also this tars with other countries, then it is the, the price is gonna be the one driving the, the, the decision, the decision making. And it may be not significant shifts on the, on where to buy.

The important thing is that in those cases is the impact on the consumers. Because at the end of the day, it is not the, the, the companies, the the ones that are gonna be absorbing the, the, the whole effect of tariffs. But the price is gonna be passed to consumers, then you will see if a staple product, well there is gonna be inflation, but the demand will continue. But if you are looking at some products that, that, that, that are not in the, the basic consumption that a family or household has in the US if it's a a tv, well they can wait two more years to change the tv, they can change three more years to change the, the, the washing machine or they can repair the one that they have. So that is gonna change the, the, the, the consumption there, there may be some impact in the, in the in, in the demand. And of course while that, that that will affect the, the potential demand of the logistic services.  

William:

I have a, a fun little example to riff on here, which is yeah, please. I was, I was digging into our, our Mexico shipments to Montana and I noticed two shipments of luxury cars. There's a, a Ferrari and a Lamborghini both with declared value of around a million dollars. And if all of a sudden you have to pay an additional 25% tariff on that, you're gonna source your Ferrari or Lamborghini somewhere else. That's, that's the kind of trade that's just gonna vanish.

Chris:

Is there anything else, you know, anything else as far as analyzing the trade data that you want to jump in on that as well? William, any other fun stories that you can tell us?

William:

Oh man. I mean, umm more interested on what kind, all kinds of things

Chris:

More interested on what kind, all kinds of things. Sorry, keep going.  

William:

Yeah. You can basically see all kinds of things flowing into the US from Mexico and it's, it really runs the gamut. And you could do this in a state by state basis as the article that Janine shared in the chat shows and it's, there's such a major Mexico, there's such a major trading partner of ours that basically any imaginable good, someone is sourcing it, maybe you're in, you're in New Hampshire and you don't realize that the the green coffee beans that you're picking up for your coffee roasting, they're coming from Mexico. All kinds of little stories like that.

Chris:

Yeah. So some real world examples of how companies are, are leveraging trade data to mitigate risk and, and like find new opportunities right now is I, I'd love to hear some, some stories around leveraging trade data for competitive advantage if possible.

William:

Yeah, totally. So we see this every day in sectors that deal with export control like microchips or aircraft parts. All of them have significant compliance requirements, the demand close monitoring of their supply chains and our data allows 'em to do that. But let's look at this current situation here. So imagine you're a US dairy exporter and you realize that 40% of your dairy exports are going to Mexico and Canada, 40% of all US data exports, and they may even be facing retaliatory tariffs. So if you have to start exploring other markets, but you don't necessarily know who major buyers in those countries are. This is a great place to start with detailed trade data and it's super easy to do. So you just start looking at import records from those countries, the countries you're considering, and you can type in your HS codes, your relevant HS codes, and immediately you get names, addresses, and also a sense of which specific types of products those companies are buying.

Like, you know, not just dairy as a general category, but are there types of cheese that are in demand, things like that. And critically you also get the declared market value of their imports so you can understand what the competition really, really looks like. Not at the consumer level, but at the actual declared value level. But to build off that more generally, this data has been tremendously useful for companies finding new clients, especially in logistics. So Flexport, for example, while using our data, has been able to find new clients daily in the dataset. And this is the case for people in logistics broadly, but as well as in manufacturing to try to find, you know, factories that you wanna source with or to try to find new, new contracts for a factory you may be operating.  

Chris:

That's great. Just great examples for for companies currently not using trade data, you know, what's the ABCs of how do you start, like you kinda went through kind of some of the use cases of what you would look at, but if this is new to you, trade data's, trade data's a you know, it's, it can be complex if you're not looking at it effectively. So what's your, the ABCs to this of letting somebody, if somebody's just gonna get started on it, looking at it, what they should be doing?    

William:

Yeah, Chris, so it can seem pretty complicated if you haven't worked with these records before, but you would be, I think, surprised by how straightforward and immediately useful the data points can be. So the key data points that you'll need to work with are gonna vary for you industry by industry, but in general you should be focused on the names of the counterparties to a transaction. So the businesses on either side, the HS codes of the goods shipped or the product description, the value of those goods. That's all, that's a really good place to start. That's great. Each data set we have is different because global custom disclosures aren't entirely standardized despite our best efforts. So some data sets may have super valuable and exciting fields like a container number or marks and numbers or carrier info that others won't contain, but all of them will have consignee names and ways to identify the products in each individual shipment down at the container level that those consign is receive. And, but, but really what I'm trying to say here is there's, there's lots of complicated and exciting stuff that we do that our clients do with this data, but the barrier to entry here when it comes to getting immediate value out of it is almost zero. If you know the name of a competitor or you have a product category in mind to examine, you can get useful information immediately with really no processing or data science needed.

Chris:

That's great, that's great strategic growth and, and, and future outlook. Let's, let's shift a little bit. Thanks William, that was great. But Alejandro, what regulatory or policy changes should businesses be watching for in the next, I would say week, but even 6 to 12 months if we were to try to guess that far out? Like what should they be watching? Where are they, should they be looking?

Alejandro:

I think that probably the most important matter at this time is the future of the USMCA. And it is important to understand what is going to happen in the next months and particularly next year. Because most of the, the media, all the headlines say, well next year it may be the death of the USMCA, if we have this, eh, trade, the war, potential trade war between or Mexico, the US, Canada, et cetera. First of all, if it, it is important to understand again what is gonna happen, what is in the agreement. The agreement doesn't say that it's gonna, it can be finish in 2026. In 2026 is an opportunity for the three countries to do a review of the agreement. So each country we will have the possibility of saying, okay, you know, I think that the agreement is not working because of this and that, and probably we should work on the changing, changing something.

It is not a, an open full renegotiation of the agreement. It could be, but it might not be, it might not be the case, eh, we we should expect changes. Yes, definitely. And the agreement was, eh, negotiated precisely to do that because I, I don't know, I was even from, from from someone a couple of days ago saying, well, when the USMCA was negotiated, eh, six years ago, AI was not a, a significant thing. But now AI is all over the place. So because it's over the place, well there, there should be some object in the, in in the agreement. There, there are special areas of concerns, like again the automotive industry, potential changes in rules of origin. Also how, well also you've been reading a lot in the news that there is a inflow of Chinese investment in, in Mexico that they are establishing plants in Mexico basically to move just some products from China to Mexico and then export them to the, to the us.

That is happening in some cases, but it's not something that is happening in a generalized way. So, but there may be some concerns from the, from the US about specific products that may be manufacturing in, in, in Mexico by Chinese companies that the, the US may not feel that comfortable with that if you are talking, I don't know, it may not be the case, but just semiconductors or something like that. Well there may be some, some issues that may be reflected in the USMCA saying, well, okay, well in these industries it should be real North American, eh, eh, products produced.

Chris:

Yeah.

Alejandro:

So that, that, that may change, that may change a little bit. But definitely the, the most important piece of I would say re somewhere regulation that may affect the three, the three countries is the future of the, of the USMCA. We have to keep an eye on that. The revision may start earlier, which it could be, it could be fine. There is a nothing like that. And, and again, it is not that next year the they decide well, not to continue with the agreement, it's gonna end up there is a period of 10 years to have the agreement in some way revoked. So there, there, there are more time for, for negotiation. Great. There is more time for negotiation, you know?

Chris:

It's great points. I'm just gonna pop over there. There's some questions. We've got a bunch of questions that have been popping up. One, what that looks pre that there's a theme to a few of these that I want to just cover off, but the one that I'm seeing is, and this is looks Alejandro, maybe you could answer this one first. Disruption usually creates opportunity, and I'm just reading through this, but is there, is there some opportunities that we see arising from this uncertainty, reactiveness disruptions? Are there actually some opportunities for businesses to be able to take advantage? That's a question either one of you could maybe take a crack at that, but maybe Alejandro you wanna start with that? That'd be great.

Alejandro:

I think that one of the most significant opportunities, and it's something that started actually during the first Trump administration, is this intention to start some decoupling from, from China. And if this trend continues, well there are some things that are gonna be really difficult to, to manufacture here in the US and the US will look for allies for countries that the US can, can trust. And one of them is, is definitely Mexico. So that that will open, that will open opportunities. It is not that I think that some people say, well, Mexico can substitute China. That is not gonna happen because, well you, you see the size of the economy of Mexico vis-a-vis the one, the the the one of China, the number of factories that are in Mexico vis-a-vis the number of factories in China. No, it could be some sort of compliment that it, it it can help.

And the opportunity is, is there, so companies that are thinking about develop, establishing manufacturing facilities in other countries vis-a-vis Mexico, if there is this intention to continue with the coupling of, of China and potentially other countries from from Asia, well there is a, a significant, significant opportunity and there are important complementarities between the two, the two economies and that just wearing my hat of the US Mexico Chamber of Commerce. It is not just to benefit Mexico or benefit the US the idea is to benefit both countries. Yeah. To work together, to have North American products just as you have a, the airbus as a European plane, well you may have, you have yet that is a North American plane. So it's, it's important to explore the possibilities of working together and opportunities are gonna be for the, for the three countries.

William:

Yeah, and

Chris:

Please William, jump in there. This is great.

William:

That was a wonderful response Alejandro. And what I can speak to about this is really how you can use trade data to identify opportunities and navigate these disruptions more effectively. And what, what I see the value of trade data being in a situation like this is just to harp back on this, it, it provides both real time updates and a historical perspective. So you can work with this, you can look backwards, you can say, okay, like here's what the 2018 section 301 tariffs looked like at the container level in terms of impacts on port traffic. And then you can zoom out and you can model how companies shifted their supply chains over the following years. And that is directly applicable to our situation. Right now, if you're a logistics company, if you're trying to get business from industry impacted by this, you can get a sense of what moves companies are already making now and will continue to make to adapt to this new environment.

And that can inter, that can inform your contract proposals, your sales outreach. Now let's say you're one of the businesses being disrupted, well you can see exactly how your competitors are responding down to the carriers, the freight forwarders and you know, their new manufacturers in new countries. And that can also inform your strategies. And let's say that you're in this privileged position of being in this, in this situation of disruption and you have, you know, an idea for an unfilled niche or a newly viable trade lane. Well you can look at this data and you can see how open that is. I, is there space for you to move in? Who else is trying that? What kind of results are they getting? So there are many ways that people at all levels of this can benefit from even a very basic use of this data.

Chris:

That's great. It's great answer. So we're getting, we're getting a number of questions around around sourcing. I've, I've, there's a whole bunch of questions around sourcing other, but, but people are trying to, one, the first question, I'm just gonna call it straight out here, that is the general sentiment between the US Mexico, Canada industries, the same, coma, in general question mark e.g. are most gearing up for inevitable price increases because viable fast alternatives are not possible. Person has suspicion, but I don't want to add that, but that's a question. Did, does anybody else wanna answer that or should I back that up? Do you want me to hear it again?

William:

I'm, I'm happy to hop on.

Chris:

Please jump on there.

William:

Perspective. I'll, he, if you wanna read the question in full, it's in the chat there. So yeah, what we're really seeing here is a lot of uncertainty with the tariffs. And if you are operating manufacturing in the US or dealing with the complicated supply chain, you have to reckon with the fact that tariffs can be imposed and revoked with the stroke of a pen. The same cannot be said about building out new manufacturing capacity about, you know, signing new logistics contracts. I mean, sure that, that's a pen too, but that's many more like that, that's a much larger commitment compared to the, the sudden whiplash that can occur. And an example of that whiplash really threatened tariffs on Columbia back in just a, a couple weeks ago when Columbia was refusing to accept deportation flights and there were a, a huge number of industries that would've been immediately impacted, but those, those tariffs were threatened and then dropped within a day. So the question is, even if these tariffs do go through, how long will they remain active? Is there a chance that the, the pain and concern inflicted on companies on these industries will be enough to get the kinds of radical concessions that will satisfy the administration? And if so, will they then be dropped? So perhaps the wait and see, at least in the near term is the thing to do and consumers will just sort of have to accept price increases, which may actually be part of the administration strategy.

Chris:

Alejandro, anything to add to that?

Alejandro:

Yeah, I was looking at the, at the question about whether you can find a reliable sourcing with the same quality, et cetera. It definitely depends on the, on the industry and the, and on the product because you have also to consider that the, the manufacturing in, in China has been, well it grown a lot since its integration to the World Trade Organization. And a lot of companies bet completely on the, on the Chinese manufacturing. And at the same time, well in Mexico there were some, some industries that started to lack in, in terms of that development because the, the, the, the demand for the product diminishes significantly. So in some cases Mexico is just catching up with the, with that there are some industries like auto parts, automotive, even the parts for the electric industry, medical devices that they, they've been growing strongly since the inception of, of, of, of NAFTA

And you can find reliable, extremely high quality products in those, in those industries. But there are some others like, I don't know the, the toy industry in which Mexico at some point was very, very strong then Mexico like a little bit. But now you see big, big companies that you see in all the big retailers that the same doll or very similar doll are very in Mexico or in, in, in, in China. So they are really catching up. You see European companies that they put together plastic for construction, you may be wondering what's, what's a company that they have one of the largest manufacturing companies in Mexico, but there are some other, other toys that, well they is tough to to to manufacture them in Mexico, I don't know, 20 years ago. And they are coming back. So it is not that you can find immediately find a, a a a replacement.

And the other thing is, is capacity. So I was mentioning before, well the, the supply that you may get for certain products in, in, in China it's, well several times larger than than the one in Mexico. So you're gonna be competing with other, with other companies looking for the same, the same product that have a more limited production in, in Mexico. But in time, just as the automotive industry develop in Mexico, if things are a right they, they align, you should be able to find the, the same sort of quality products in, in, in Mexico,

Chris:

It's

Alejandro:

Other industry.

Chris:

It's a great point. I really like the fact that you timestamped it right of when it might not have been, that was before, but in the last number of years, a lot of those industries have come back and futures are still coming back and sourcing and checking on those suppliers of who's bringing those or if you can get them in Mexico now is the answer could be very different than it was five years ago. You may find three new suppliers now. Right. That's, it's a great point. We're butting up against the the hour, so I would love a one or two minute wrap up from, from each of you, you know, Alejandro or and William please just one or two key takeaways. We've learned a ton here today and this has been incredible. I thank you both, but if there's one or two takeaways that's it that we could, people should take away from this, what are they from each of you? If whoever like to start that, I'd love, love to hear it.

William:

I can do this really quickly here. So yeah, I'm just gonna hit this point a third time. When we look, when we look at this trade data and we're trying to navigate this trade war situation that's unfolding, we're in a privileged position because it's not a totally new scenario. We saw this happen in 2018 to a smaller extent. So you take this trade data and you combine the real time and historical perspectives and that allows you to really understand what signals to look for as you're modeling how things from the micro to the macro level, how individual equities, how larger industry supply chains, how all of that is shifting, you know, what signals to look for and that is the information that you need right now to navigate these really turbulent times with confidence.

Chris:

That's great, Alejandro.

Alejandro:

Yeah, I I think that couple of recommendations, one would be don't look at the US-Mexico trade relationship in isolation. You have to see what is going on around the, the world now that there is the threat of reciprocal tariffs with other countries. How is that is gonna affect whatever happens between Mexico and the, and the US because you may see, oh, well this 10% or whatever tariff in certain product is gonna really impact the what I'm doing with Mexico. And you start looking at other countries and you see that the reciprocal tariff is gonna make it even more expensive or more difficult to bring it from, from from another country. So the the, the story is gonna, the story is gonna change also. You have to be looking at which, and not only tariffs any other, eh, eh, trade restriction is responding to, to business, to economic situations.

And those that are responding or are using for other different things like in order to get some more, more actions from Mexico in order to combat fentanyl trafficking or with migration. Because those, those tariffs, at the end of the day, they may not stay forever because they are looking for specific areas that are not related to economic issues. But if you see some other restrictions that are responding to a specific sectors, industries like the automotive industry, those are the ones that you have to really take into account because they may, they may be there to stay, to stay for longer. It is important to distinguish among, among these different restrictions or, or, or, or barriers and also look beyond just the price manufacturing, et cetera. Because when, just one example is what happens in terms of intellectual property protection for US companies at some point to manufacturing China, well they were required to do joint ventures with Chinese companies as part of the joint.That joint venture was to share the technology. And they, well, all in all, you have companies from, from China doing a, using that technology, that intellectual property to produce competing products. In the case of Mexico that, that, that doesn't happen because Mexico do not require any joint venture, any sharing of technology. So you may see that that in, in the medium long term for for, for even for, for the US government, that creates more, more confidence on working together with countries like Mexico or Canada or other, or other contries. So it's important to see just beyond the, beyond the tar, beyond the, those, those barriers that that will open important opportunities. And you foresee whether the, the, the future of the US Mexico trade relation is gonna be vis-a-vis what happens with, with, with, with other, with other.

Chris:

Excellent. Thank you. With that being said, I think we're up at time everybody, but I want to thank both my panelists again, Alejandro William, that, that was excellent. This is something we're gonna be continuing at Import Genius. You know, we've been, we're going on 18 years in this space. We have a ton of tasks and knowledge and we worked with a, a number of companies navigate this, but we wanna continue these educational seminars. So everybody thank you for attending, we really appreciate it. The theme is con the theme here we're gonna leave is this is going to be a continued turbulent time, right? We're gonna hear it. Businesses are reactive. We don't see businesses slowing down from that. They're gonna continue to be reactive. If we can help you out at import Genius, just with the visibility and the dashboard to help you navigate those turbulent times, please use us. But really would love to hear your feedback on the thought leadership today cause personally I just thought this was a, a great webinar. So thanks everybody for attending. And with that being said, have a great day everyone you're gonna see receive a recording of this webinar. Thanks everyone. Bye now.

Alejandro:

Thank you. Bye. Thank you. Thank you.