Canadian parts suppliers with Mexico-based operations say that the uncertainties created by the Trump administration in the United States have put them into a holding pattern.
The rhetoric of the new U.S. administration regarding Mexico has included discussions of hastening renegotiation of the North American Free Trade Agreement (NAFTA), introducing a 20 per cent tariff on Mexican imports, and building a wall along the entirety of the 3,145-kilometre U.S.-Mexico border.
Whether any of these discussions will materialize into functional changes in policy is yet to be seen, and that’s the problem. Canadian businesses with interests in Mexico must take a wait-and-see position.
“Nothing has really happened yet,” said Paul Bhogal, Managing Director of BSB Manufacturing Ltd., a supplier of CNC machining and supply-chain management services. “Are we concerned? A little bit, but it’s not really changing the direction of the business yet.”
BSB opened a 40,000-square-foot (3,700-square-metre)manufacturing facility in Coahuila, Mexico, six years ago and has invested between $3 million and $4 million there. Bhogal said the company views Mexico as a high-growth market, a stance that has not changed under the Trump administration.