Ernesto Sánchez Proal, president of the Guadalajara chapter of the American Chamber (AmCham) Mexico, believes that the presidency of Donald Trump will positively impact Mexico’s exports and Foreign Direct Investment (FDI). He asserts that tariffs on Chinese products will create opportunities for Mexican companies to become suppliers to the United States.
Expectations from American Companies in Jalisco
Sánchez Proal notes that American companies in Jalisco have positive expectations regarding Trump’s administration. They view the tariffs as a pressure tool for Mexico to take more effective actions against issues like drugs, fentanyl, and migration.
Impact of Tariffs on Companies
The imposition of tariffs on China is expected to lead to new or increased tariffs, prompting a shift of projects from Asia to Mexico. This may also result in Mexico implementing a program to replace Chinese imports, particularly components integrated into products destined for the US.
Opportunities for Mexican Companies
Sánchez Proal sees a positive scenario for Mexican companies, with American firms in Mexico betting on this outcome. An analysis by AmCham’s Economic Intelligence area supports this view, suggesting that tariffs on various countries could level the playing field.
Potential Negative Impact and Affected Sectors
The automotive sector could initially be at risk, but it also presents significant opportunities. Auto parts often include Chinese components, creating an interesting opportunity for medium and small Mexican companies.
Export Flow to the US
Sánchez Proal does not foresee a negative impact on export sales but anticipates adjustments in company costs. He expects an increase in exports as the US will need to source products from the region instead of China.
Competing with China
The only way to compete with China is through a trade bloc, with supply chains spread across North America. A similar production chain is necessary to face China’s highly developed production capabilities.
Role of AmCham
AmCham’s trade and investment unit, with strong contacts in US business organizations, has great potential to connect Western Mexican companies with export opportunities and co-investments from the US.
Pressure to Stop Buying from China
There will be significant pressure to stop buying from China due to high tariffs, creating opportunities for Mexican companies.
Increase in Foreign Direct Investment
Sánchez Proal expects an increase in US investment in Mexico, consolidating and expanding the current investment levels. Both new investments and reinvestments in Mexican companies, particularly in the automotive components sector, are anticipated.
Role of State and Federal Governments
State and federal governments must work together to support SME development, quality certification, and better business practices.
Commitment to Semiconductors in Jalisco
Sánchez Proal does not see chip manufacturing as feasible in Jalisco or Mexico due to high capital and specialized talent requirements. However, related industries like chip packaging and card integration, such as Foxconn’s work for Nvidia, are more viable.
Source: El Informador
