Latest news with #TheNearshoreCompany
Forbes
21-07-2025
- Business
- Forbes
How U.S. Immigration Policy Is Reshaping Mexico's Manufacturing Sector
Jorge Gonzalez Henrichsen, Head of Business Development and Co-CEO at The Nearshore Company. If there's one thing the past few months have made clear, it's this: U.S. immigration policy doesn't just affect the U.S.—it reverberates throughout the entire North American labor ecosystem. And for Mexico, that means real changes in workforce availability, skill composition and long-term nearshoring strategy. As someone who's spent the past two decades helping companies navigate manufacturing expansion into Mexico, I do see what's happening on the ground—and I believe there's a story here worth paying attention to. A Silver Lining In Today's Landscape Recent changes in U.S. immigration enforcement have led to an increase in deportations and a decline in unlawful border crossings. That reality is displacing many foreign-born workers, many of whom are from Mexico and had been living and working in the U.S. Where do they go? For many, the answer is simple: back to Mexico. And while I wouldn't go so far as to say they're all heading straight into manufacturing jobs, a portion of this returning workforce—particularly those with basic education or technical skills—are likely to be absorbed by Mexico's growing manufacturing industry. For years, many people in Mexico looked north to the U.S. as an opportunity for upward mobility. But today, with legal paths narrowing and risk rising, many are choosing to stay and find work in Mexico. That shift is subtle, but powerful. It's keeping more skilled workers in Mexico, where they're now in high demand. The Rise Of The Middle-Skill Workforce In manufacturing, the biggest labor bottleneck isn't always engineering talent or PhDs. In my experience, it's what we call 'middle-skill' workers, such as machine operators and supervisors. Roughly 130,000 students graduate each year from technical and engineering programs in Mexico, according to a TechCrunch article. These could be some of the very people who once saw emigration to the U.S. as a sure path to prosperity. Today, however, that equation is shifting. Mexico's domestic job market is heating up—driven by nearshoring, U.S. trade policy and shifting supply chains—and that's creating stronger incentives to build a career at home. Why It Matters Now Since early April, when new tariffs and trade realignments were announced in the U.S., we've spoken with many manufacturers from the U.S., Asia and even Europe who are re-evaluating Mexico as a central node in their supply chain strategy. That renewed attention brings opportunity—but it also brings pressure. Mexico must be ready, and that means understanding the talent landscape as it evolves in real time. There's a temptation to frame Mexico as the U.S.'s 'backyard'—a place for outsourced labor and low-cost fulfillment. But I've come to embrace the metaphor in a different way: Every well-functioning home needs a clean, efficient, well-organized backyard. The tools, the storage, the space—it all matters. And right now, I believe Mexico is positioned to play a pivotal and high-capacity role in North America's industrial landscape, though there are a few best practices manufacturers will need to keep in mind. A Few Words Of Advice For manufacturers looking to expand into Mexico, make sure you don't take action blindly. Workforce availability is improving, yes, but it's still regionally uneven. Consider your site selection carefully. Look to regions with strong technical education pipelines and infrastructure. And make sure your strategy includes not just labor cost savings but also long-term talent development. The immigration debate in the U.S. will continue, but in the meantime, the ripple effects are creating new possibilities on Mexico's side of the border. For those of us paying attention, that's more than a headline—it's an opportunity to plan, build and move forward. Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Forbes
05-05-2025
- Business
- Forbes
Tariffs And Nearshoring: Uncertainty, Strategy And A Path Forward
Jorge Gonzalez Henrichsen, Head of Business Development and Co-CEO at The Nearshore Company. If there's one word that best describes the current climate around U.S.-Mexico trade, it's uncertainty. Ever since former President Trump announced plans to impose a 25% tariff on Mexican goods, companies with nearshoring strategies have been left wondering: What does this mean for my business? Should I keep moving forward with my plans in Mexico, or do I hit the brakes? As a company deeply dependent on cross-border commerce, we've spent countless hours speaking with clients, trade experts and customs brokers to get a sense of what's happening on the ground. What we're seeing is a tale of two extremes: Some companies are in full-blown panic mode, while others are taking a wait-and-see approach to see if the tariffs will stick around. The truth, as always, lies somewhere in between. One of the biggest challenges in navigating this tariff situation is that it isn't just about risk—it's about uncertainty. Businesses know how to manage risk. Insurance companies, for example, calculate and mitigate risk all the time. But uncertainty? That's a different beast. It makes planning nearly impossible. In prior years, many companies operating under the U.S.-Mexico-Canada Agreement (USMCA) paid limited attention to the declared value of goods crossing the border. Duties were zero or minimal, so as long as everything was documented correctly, there wasn't much reason to worry. (At the time of this writing, goods from Mexico that aren't covered by the USMCA, as well as steel, aluminum and automotives, are subject to 25% tariffs.) With the uncertainty surrounding tariffs, our clients are scrutinizing every detail—double-checking invoices, questioning valuation methods and seeking legal counsel to understand their true exposure. At the core of this debate is a fundamental question: Will these tariffs bring manufacturing back to the U.S.? It's hard to say. The U.S. is facing a shrinking working-age population, a trend that was previously offset by immigration. With legal immigration becoming more restrictive and increased efforts to reduce illegal immigration, some are expecting the labor shortage to become more pronounced. The reality is that no matter what happens with these tariffs, manufacturing companies still need a labor solution, so some might feel nearshoring is their best bet. Given all this uncertainty, what's the smartest path forward for businesses considering nearshoring? My advice is simple: Do the homework. Businesses that once had the luxury of being somewhat relaxed about cost structures can no longer afford to be. If you're considering nearshoring, conduct a deep financial analysis. Assume the worst-case scenario—a 25% tariff on the total declared value of your product—and determine whether your margins can still hold up. In early February, some said they believe that 25% tariffs on Mexican goods are unlikely to last. Regardless of whether any do, in the short term, we may see temporary disruptions. If you can survive a few months of uncertainty, then pressing forward with nearshoring may still be a viable long-term strategy. If the math doesn't work with a 25% tariff, you may need to explore other options. That could mean delaying your move to Mexico, considering automation investments or looking at alternative manufacturing locations. However, bear in mind that tariffs and trade restrictions will impact businesses everywhere, not just in Mexico. Despite all the noise and political maneuvering, one thing remains clear: Nearshoring can still be a valid long-term solution for North American companies facing labor shortages and supply chain challenges. Even with short-term uncertainty, the fundamentals haven't changed. Brands will need to take the long view and ensure the benefits of nearshoring outweigh the risks. Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
