Transport Security, Infrastructure Boost Competitiveness: IMCO

Given its improved position for trade with the United States, Mexico should accelerate its port refurbishment and ensure energy access to capitalize on the relocation of companies, suggests the Mexican Institute for Competitiveness (IMCO). The institute stresses the importance of transport infrastructure and ensuring security conditions to reduce logistics costs.

On April 2, the Trump administration introduced a general 10% tariff on imports from most countries, with higher tariffs on nations with larger trade deficits with the United States. For Mexico and Canada, the plan includes a 25% tariff that is suspended for goods complying with the USMCA rules, with the exception of steel and aluminum. Goods from Mexico and Canada not meeting USMCA rules face a 25% tariff, with energy and potash at only 10% tariff while executive orders are active. In response to tariffs on key sectors, Mexican President Claudia Sheinbaum stated Mexico will prioritize negotiation and Plan México to boost national export content.

Plan México proposes the establishment of Well-Development Hubs across the country, each tailored to attract specific industries such as semiconductors and automotive in the Border Region, energy and pharmaceuticals in the Gulf of California, and aerospace and agribusiness in the North. These hubs aim to create new industrial corridors and offer benefits like fiscal incentives and special customs regimes to encourage investment and development, as reported by MBN. 

IMCO Recommendations 

According to IMCO, despite the ongoing tariffs on certain goods, Mexico is in a relatively favorable position compared to other countries. This situation presents a potential opportunity for Mexico and Canada to become more attractive destinations for investment. The institute highlights the importance of concrete actions to solidify Mexico as an appealing location for investors. Plan Mexico and nearshoring strategies will be strategic to attract and retain investments in a turbulent global economy, says IMCO.

The institute proposes several actions that would allow Mexico to capitalize on its relatively favorable position. These include evaluating priority industries to increase national export content and substitute third-country suppliers for the United States. IMCO also recommends accelerating the development of 11 port expansion projects under Plan México to enhance logistical competitiveness with the world and developing a cargo security plan for roads and railways to reduce US export costs. "Part of the success of Plan México depends on security, and its associated costs, during transit throughout the country. The National Guard can take advantage of information from companies about critical insecurity hotspots to focus their efforts," reads IMCO’s press release.

Further proposals involve aligning the training of 150,000 professionals and technicians with the needs of priority industries and promoting energy supply projects in the first 15 Well-Development Hubs.