As the global manufacturing landscape continues to evolve, one factor remains clear: the volatility of U.S.-China trade relations shows no signs of stabilizing. While manufacturers once relied on China for low-cost labor and mature supply chains, those advantages are increasingly offset by rising tariffs, extended transit times, geopolitical tensions, and regulatory uncertainties. By contrast, the U.S.-Mexico-Canada Agreement (USMCA) continues to provide a stable, tariff-friendly framework for companies operating in North America—especially those manufacturing in Mexico.

Understanding USMCA Trade Benefits

The United States-Mexico-Canada Agreement (USMCA)—in effect since July 1, 2020 as a successor agreement to NAFTA—was designed to facilitate tariff-free trade among the three North American nations for goods meeting specific origin criteria. Key benefits of the USMCA under its original terms include:​

• Elimination of tariffs on qualifying goods;
• Updated rules of origin to encourage North American content;
• Streamlined customs procedures and digital trade enhancements;
• Enhanced protections for intellectual property​.

However, as of April 2025, the U.S. has imposed additional tariffs on certain imports from Mexico and Canada, citing national security concerns. These include:​

• A 25% tariff on goods not covered under the USMCA;
• A 10% tariff on energy and potash imports from both countries.

It’s important to note that most USMCA-compliant products remain exempt from these new tariffs, preserving many of the agreement’s original benefits. Nonetheless, the evolving trade policies underscore the need for manufacturers to stay informed and adaptable.​ The trade and tariff space is a key priority for Trump’s second administration, and more shifts are likely in the months and weeks ahead.

For businesses considering nearshoring to Mexico, partnering with experienced compliance experts like NAPS can provide critical guidance through this complex trade environment.

The China Tariff Landscape: Why Manufacturers Are Moving On

Over the past decade, tariffs on Chinese goods entering the United States have steadily increased, affecting everything from consumer electronics to industrial components. The Biden administration maintained many of the Trump-era tariffs, and in early 2025, the newly returned Trump “2.0” administration has doubled down with additional restrictions targeting strategic industries. These include (but are certainly not limited to) technology components, automotive parts, textiles, and semiconductors.

Beyond sky-high tariffs, other risks and limitations are becoming more apparent in China:

• Geopolitical tensions continue to drive uncertainty, especially with regard to Taiwan and U.S. tech policy;
• Shipping timelines are growing longer (4–6 weeks from East Asia vs. 3–7 days from Mexico)—particularly as more companies detour around the Cape of Good Hope rather than using the shorter but riskier Suez Canal route;
• Intellectual property concerns are increasing in sensitive sectors such as aviation, aerospace, and technology;
• Labor costs are rising in China’s coastal provinces;
• Time zone misalignment continues to cause project delays and communication friction.

By contrast, Mexico offers proximity, favorable trade conditions under USMCA, and a culturally and economically integrated workforce that many U.S. manufacturers find easier to train, manage, and scale.

Why Mexico Is the Best China Tariff Alternative

In recent years, Mexico has become the go-to destination for companies seeking a long-term solution to minimizing tariffs and leveraging supply chain resilience. From medical devices and electronics to food packaging, textiles, and industrial goods, nearly every major sector has found unparalleled opportunity in Mexico’s skilled labor, modern infrastructure, and proximity to the U.S. market.

Key advantages of manufacturing in Mexico include:

• Duty-free trade on most goods with the U.S. and Canada under USMCA;
• Substantial cost savings on transportation, customs, and warehousing;
• The efficiencies and advantages afforded by a just-in-time operational approach;
• Reduced risk of disruption from global crises, political tensions, or natural disasters;
• Strong industrial zones with workforce pipelines and specialized facilities;
• Healthy infrastructure with a strong government commitment to continued improvement;
• Ease of cross-border collaboration, with overlapping work hours and minimal travel time.

How NAPS Helps Companies Nearshore With Confidence

For manufacturers that want to move quickly and avoid the red tape of setting up operations from scratch, NAPS provides a turnkey solution. As a leading shelter services provider in Mexico for more than 30 years, NAPS offers everything companies need to begin production efficiently and in full compliance with local laws.

By partnering with NAPS, manufacturers can:

• Secure production-ready facilities in Mexico’s top industrial regions;
• Tap into experienced labor pools across diverse industries;
• Comply with import/export, tax, and labor regulations through shelter services;
• Avoid delays by leveraging NAPS’ logistics, HR, and administrative infrastructure.

Whether you’re shifting supply chains away from China or expanding into a new North American market, NAPS gives you a foundation for scalability and success.

A Smarter, Safer Way Forward

There’s no doubt that the global manufacturing equation is changing by the day. Tariffs, logistics, and risk mitigation are top of mind for every business looking to stay competitive. For U.S. manufacturers, Mexico represents more than a backup plan—it’s a smarter, more strategic hub for sustainable growth, both now and in the years to come.

If you’re looking to reduce your tariff exposure and secure a stronger supply chain for the future, consider the advantages of Mexico—and the value of a manufacturing compliance and production services partner like NAPS. Connect with our team of experts to explore the many options available to your business today.