To move or not to move? Manufacturers hesitant to nearshore before USMCA review

Core Insights - The U.S.-Mexico-Canada Agreement (USMCA) is under review, prompting manufacturers to consider strategies to minimize tariff exposure [1][5] - Cross-border trade has been affected by the transition from NAFTA to USMCA and the imposition of tariffs, with significant duties on non-compliant imports [2][3] - Companies are reassessing their compliance with USMCA to leverage tariff exemptions, which has led to competitive advantages for some [3][6] Trade Dynamics - The U.S. imports $505.5 billion from Mexico and $411.9 billion from Canada in 2024, making them its largest trading partners [3] - Tariff exemptions have encouraged firms to evaluate their products for compliance, although the overall tariff situation remains uncertain [2][4] Manufacturing Strategies - Manufacturers with global supply chains are hesitant to make significant changes due to the fluid tariff situation and upcoming USMCA review [4][5] - Some companies are exploring shifting manufacturing to Mexico, but there has not been a significant resurgence in U.S. manufacturing interest [4][5] Compliance Benefits - Companies already compliant with USMCA are experiencing reduced costs and gaining market advantages [6] - Methode Electronics and Newell Brands have reported increased business due to their USMCA-compliant operations, allowing them to avoid tariffs [7]