Asia, Beyond China: Opportunities and Risks

For decades, when Mexican companies talked about doing business in Asia, what they often really meant was China. That approach is becoming increasingly outdated.

Asia is neither a single market nor a Chinese supply chain operating under different flags. Vietnam, Malaysia, Indonesia, Thailand, India, South Korea, and other economies have developed sophisticated manufacturing ecosystems of their own and, importantly for Mexico, some offer something China cannot: preferential access under Mexico's extensive network of free trade agreements.

Vietnam is perhaps the best example. Mexico is already Vietnam's second-largest trading partner in Latin America, behind Brazil. Bilateral trade reached approximately US$6.4 billion in 2024, increasing 21.8% from the previous year, while during the first nine months of 2025 it had already reached US$5.9 billion, another increase of approximately 24.2%.

These figures show that Vietnam is no longer a marginal trading partner, although Mexican companies have arguably only begun to understand its potential.

The CPTPP Advantage

The key difference between importing from China and importing from Vietnam is not simply labor costs, manufacturing capabilities or logistics. Increasingly, the decisive factor may be origin.

Mexico and Vietnam are both parties to the Comprehensive and Progressive Agreement for Trans Pacific Partnership, or CPTPP. Consequently, goods that qualify as originating in Vietnam may receive preferential tariff treatment when imported into Mexico, a distinction that has become significantly more valuable as Mexico has increased tariffs applicable to products originating in countries without preferential trade arrangements.

Recent Mexican tariff policy has particularly affected sectors such as steel, textiles, apparel, footwear, plastics, aluminum, furniture, auto parts, and electrical products. However, qualifying goods originating in countries with which Mexico has a trade agreement may continue to benefit from preferential treatment.

The difference between buying comparable products from two Asian countries can therefore be measured not only in manufacturing costs, but potentially in double-digit tariff percentages. This creates interesting opportunities in textiles, footwear, furniture, electronics, machinery, automotive components, agricultural products, and other manufactured goods.

The opportunity also works in the opposite direction. Vietnam has a population exceeding 100 million and sits at the center of one of the world's most dynamic economic regions. Mexican food products, beverages, agricultural goods, industrial components, and specialized manufacturing may therefore use CPTPP preferences to enter a market where Mexican businesses remain remarkably underrepresented.

There is, however, an important catch: a Vietnamese invoice does not make a product Vietnamese.

The Origin Trap

The CPTPP does not grant preferential tariffs simply because goods are exported from Vietnam. They must satisfy specific rules of origin.

Depending on the product, qualification can require a change in tariff classification, regional value content, a specific manufacturing process, or a combination of requirements. This is particularly relevant because Vietnamese manufacturers remain deeply integrated with Chinese supply chains.

A product assembled in Vietnam using Chinese components does not automatically become Vietnamese for preferential trade purposes. The relevant questions are where the inputs originate, what transformation occurs in Vietnam, whether that transformation satisfies the applicable CPTPP rule, and whether sufficient documentation exists to prove it during a customs verification.

This is also where experienced local counsel becomes particularly valuable. Choosing a supplier based on price and a certificate provided by the supplier may be insufficient. Before restructuring a supply chain, companies should understand the local manufacturing process, verify what documentation can actually be obtained from suppliers, and determine whether contractual protections allow access to origin information and supporting records.

Mexican counsel can determine what Mexico requires at importation, but reliable counsel in Vietnam can help verify what is actually happening at the other end of the supply chain. Neither analysis works particularly well in isolation.

Moving From China Does Not Necessarily Remove China

Moving production from China to Vietnam also does not necessarily remove China from the supply chain.

The US Department of Labor, for example, has identified Vietnamese cotton garments as presenting forced labor concerns because Vietnamese manufacturers may source textiles containing cotton originating in China's Xinjiang Uyghur Autonomous Region. According to the Department, Vietnam imported approximately 70% of its cotton containing textiles from China in 2021.

A Mexican company could therefore purchase a garment manufactured in Vietnam, legitimately obtain CPTPP preferential treatment when importing it into Mexico, and nevertheless have a supply chain connected several tiers upstream to a problematic Chinese input.

Modern trade compliance increasingly requires companies to understand not only their direct supplier, but also the origin of critical materials and components. This is another area where local knowledge matters. Corporate registries, manufacturing practices, subcontracting structures, labor regulation and the availability of reliable supplier information differ substantially between jurisdictions. Due diligence designed in Mexico but executed without competent professionals on the ground can easily miss the most important risks.

The USMCA Elephant in the Room

The issue becomes even more sensitive because Mexico's relationship with the United States is entering a new phase. During the 2026 USMCA review discussions, the United States has emphasized reducing dependence on imports from outside North America, strengthening rules of origin, securing regional supply chains and addressing what USTR has described as "free riding from third countries."

This creates an interesting paradox. Mexico needs to diversify and Asia will inevitably play an important role, but Mexico cannot afford to become perceived merely as the final assembly point through which Asian products obtain privileged access to the United States.

A Vietnamese component imported into Mexico may legitimately benefit from CPTPP preferences, while simultaneously being treated as a non originating material when determining whether the finished Mexican product qualifies under USMCA. CPTPP origin and USMCA origin are simply not interchangeable.

For companies planning an investment or supply chain involving Asia, Mexico, and the United States, legal advice should consequently come before, not after, the commercial structure has been decided. A relatively small difference in sourcing, processing, or corporate structure can determine whether preferential treatment exists, whether an antidumping duty applies or whether the final product satisfies USMCA requirements.

Unfair Trade Does Not Stop in China

There is also a tendency to associate antidumping almost exclusively with China. That is increasingly inaccurate.

Mexico maintains trade remedy proceedings and measures involving several Asian economies. In a review involving Vietnamese coated flat steel, for example, Mexican authorities found evidence of government intervention and distortions affecting costs and prices and determined, for purposes of that proceeding, that market economy conditions had not been demonstrated. Mexico consequently used Brazil as a surrogate country for determining normal value.

The result illustrates the complexity of modern trade law. A Mexican importer could source a product from Vietnam that qualifies for CPTPP preferential treatment and nevertheless face an antidumping duty calculated using economic information from Brazil.

Vietnam is not unique. In 2026, Mexico also concluded an antidumping investigation involving canned pineapple from Thailand, the Philippines, and Indonesia after determining that imports from those countries had entered Mexico under discriminatory pricing conditions and caused material injury to the domestic industry.

Preferential tariffs, antidumping duties, customs valuation, origin and compliance operate under different legal frameworks. A commercially attractive tariff does not eliminate the other risks.

The Opportunity Requires Local Knowledge

None of this means Mexican companies should avoid Vietnam or Asia. Quite the opposite. The opportunity is enormous, but taking advantage of it requires abandoning the idea that international expansion is simply a matter of finding a supplier, negotiating a price, and arranging transportation.

Asia is extraordinarily diverse. Vietnam is not China, just as Thailand is not Vietnam and India is not Malaysia. Corporate structures, foreign investment restrictions, labor rules, taxation, licensing, customs procedures, contracts, and business practices vary substantially between jurisdictions.

Having strong local counsel is therefore not merely useful when a problem arises. It should be part of the investment and sourcing strategy from the beginning. The most effective approach combines Mexican trade and customs advice with trusted professionals in the relevant Asian jurisdiction who understand the local regulatory environment, can verify suppliers and structures, and can identify issues that may never appear in a commercial proposal or due diligence questionnaire.

For Mexican companies exporting the resulting products to the United States, that coordination becomes even more important because a decision taken in a factory thousands of kilometers away may ultimately determine whether a product receives preferential access at the US border.

The winners of the next phase of globalization will probably not be the companies that simply find the cheapest alternative to China. They will be those capable of combining Asian manufacturing with Mexico's extraordinary network of trade agreements while building legally sound and traceable supply chains across several jurisdictions.

Asia beyond China represents an enormous opportunity for Mexico, but understanding the map requires more than knowing where the countries are. It requires having the right people on the ground.