US Companies Head to Mexico

Manufactured goods from Mexico have comprised a larger share of the US imports, reaching 14 percent, according to the International Monetary Fund, while China’s share in it has declined. With labor costs rapidly increasing in China, and wages doubling every few years, US investors have looked to Mexico as a more competitive place for manufacturing their products. Damien Cave, writing for the New York Times, suggests the new eagerness has not been seen since the early years of the North American Free Trade Agreement (NAFTA). Many American companies such as Caterpillar, Chrysler, Stanley Black & Decker and Callaway Golf have been investing and tightening economic integration between Mexico and the United States. Trade between these two countries has grown by nearly 30 percent since 2010, hitting a record $35 billion last year. Cave concludes, “To draw more companies now, executives, officials and experts say, Mexico and the United States will need to become better neighbors, more focused on sharing labor and moving products.” – YaleGlobal