The USMCA and Nearshoring Advantage

Since 2020, supply chain strategy has gone through a reset. Global disruption exposed how fragile overseas manufacturing had become. COVID-19 stalled ports. Freight costs soared. Tariffs shifted without warning. For U.S. manufacturers, the message became loud and clear: long, complex supply chains are liabilities.

The result? More U.S. companies are looking closer to home. With the United States-Mexico-Canada Agreement (USMCA) paving the way for smoother cross-border operations, nearshoring to Mexico in 2025 is a strategic shift that delivers speed, stability, and long-term value.

In this article, we’ll dig into why Mexico has become the go-to hub for resilient, high-performance supply chains, including how the USMCA reshapes the playing field, why nearshoring outpaces offshoring, and how partners like NAPS are helping companies set up their manufacturing faster.

From Policy to Playbook: How USMCA & Nearshoring Evolved

The USMCA went into effect in July 2020, replacing NAFTA with stronger enforcement mechanisms, clearer rules of origin, and better alignment across labor, environmental, and trade standards. At first, many saw it as a routine policy refresh. But in practice, it laid the groundwork for a regional manufacturing revival.

Then came COVID-19. Global disruptions turned supply chains upside down. Companies that had relied on far-flung networks suddenly faced bottlenecks, backlogs, and ballooning freight costs. That’s when nearshoring — once a contingency plan — moved into the spotlight.

Over the next four years, the shift accelerated:

• Mexico became the U.S.’s top trading partner in 2023, surpassing China for the first time in decades
• In 2023, 92% of surveyed small and midsize businesses said shorter supply chains are critical to long-term success.
• 83.1% of Mexico’s exports went to the United States in 2024, highlighting just how closely the two economies are connected. 

Today, nearshoring to Mexico is reshaping how North American companies think about growth, risk, and competitive advantage. And with USMCA providing the trade infrastructure to support that shift, Mexico has become the go-to base for manufacturers building for the U.S. market and beyond.

The USMCA Advantage for U.S. Manufacturers

Thanks to the USMCA, it’s easier than ever for companies to tap into Mexico’s strengths as a go-to manufacturing hub. Designed to cut red tape and support regional trade, the agreement clears a faster path for cross-border production and growth.

Key benefits include:

Duty-Free Trade on Inputs and Finished Products: Thousands of products can move tariff-free between the U.S., Mexico, and Canada. That unlocks meaningful savings — on raw materials, components, and the final product or service — without compromising on quality or speed.

Simplified Cross-Border Trade: Simplified procedures reduce friction at the border. With less paperwork, fewer delays, and more control, manufacturers can run leaner operations and respond faster to shifts in supply and demand.

IP and Labor Protections: The USMCA addresses two long-standing concerns with offshore manufacturing: intellectual property theft and weak labor standards. Unlike many traditional offshore locations, such as China, manufacturers in Mexico operate under clear, enforceable rules that protect proprietary designs and ensure workforce stability.

For companies whose supply chain includes multiple touchpoints across North America, USMCA ensures smoother integration and fewer surprises, a critical asset in today’s volatile trade landscape.

Why Switch to Nearshoring in 2025?

Offshoring to Asia once promised low costs, but those savings now come with steep trade-offs. Long shipping times, high freight costs, and exposure to tariffs and political risks make offshore manufacturing increasingly difficult to justify.

By contrast, nearshoring to Mexico offers:

Speed: Ocean freight from Asia can take upwards of six weeks, assuming no port delays or customs hiccups. From Mexico, shipments can reach U.S. destinations in as little as one to five days. For manufacturers managing tight inventory or just-in-time models, that kind of speed is critical.

Tariff Stability: The ongoing U.S.–China trade tensions have made offshore pricing unpredictable. Tariffs on Chinese goods can shift overnight, impacting margins and forecasting. Mexico, by contrast, offers trade consistency through the USMCA. Most goods move duty-free, reducing risk and stabilizing costs long term.

Raw Material Access: Manufacturing in Mexico also allows for smarter material sourcing. When sourcing raw materials regionally, companies avoid the container bottlenecks and long delays that still plague transpacific supply chains. Local or regional sourcing reduces lead times and ensures production stays on track.

Greater Agility: Running operations halfway around the world creates friction. Time zone differences, travel barriers, and language gaps make it harder to troubleshoot or adapt on the fly. In Mexico, manufacturers can scale quickly, visit facilities easily, and make adjustments in real time, without waiting days for answers or flying 14 hours for an in-person review.

In short, offshoring in 2025 means longer delays and less control. Nearshoring to Mexico supports the kind of agility, transparency, and predictability modern supply chains demand — and modern customers expect.

Better Visibility Across the Supply Chain

Global supply chains aren’t just long. They are opaque, too. One weak link could stall production, and by the time you know about it, it’s already too late. Building in Mexico brings your operation back within reach and makes your supply chain management more proactive, not reactive.

What visibility looks like when you manufacture in Mexico:

• Real-time updates from partners, not post-mortems.
• Easier site visits and inspections without cross-continental travel.
• Direct contact with logistics, HR, and materials providers.

Running a modern supply chain means managing countless moving parts, from sourcing and labor to compliance and delivery. Nearshoring to Mexico brings those elements within reach, making it easier to coordinate teams, monitor progress, and adapt in real time. That visibility gives manufacturers a clearer path to performance and fewer surprises along the way.

And in industries like aerospace, medical devices, and automotive, where precision, traceability, and responsiveness are make-or-break, visibility is a non-negotiable advantage.

How NAPS Make Expansion Easier

Even with USMCA advantages and growing momentum behind nearshoring, setting up operations in a new country comes with challenges. Permits, labor laws, infrastructure, and cross-border coordination can quickly become roadblocks without the right support — or the right local expertise.

As one of the leading companies that help manufacturers expand in Mexico, NAPS delivers complete Administration and Compliance Management services that simplify every step of the process so your team can stay focused on core production, not red tape.

Compliance and Permitting: NAPS navigates Mexican regulations so you don’t get stuck in a sea of bureaucracy. No guessing, no costly missteps.

Payroll and Workforce Onboarding: From hiring local talent to setting up compliant payroll systems, NAPS ensures your workforce is ready and your HR in Mexico always runs smoothly.

Infrastructure and Facility Setup: Whether you’re starting from scratch or expanding an existing footprint, NAPS manages site selection, utilities, build-out coordination, and startup timelines.

Cross-Border Logistics and Vendor Management: From planning to execution, NAPS streamlines every link in your supply chain, not just the shipping.

If you’re looking into how to set up a manufacturing facility in Mexico, NAPS provides the structure, systems, and local expertise to help you move fast and get it right the first time.

Why Now Is the Time to Nearshore

U.S. manufacturers face mounting pressure to streamline production, manage risk, and gain greater visibility over their supply chain. Building in Mexico, with the structural support of the USMCA, offers a practical, powerful path forward.

And with the right partner, getting there doesn’t have to be difficult. NAPS helps U.S. companies set up compliant and efficient operations with full support, from infrastructure to labor to cross-border logistics. Connect with NAPS today and let’s build smarter, faster, and closer to home.