Whitepaper: For Foreign Manufacturers in Mexico, a Weakening Peso Has Advantages, but not Without Costs
Ever since Mexico’s Peso crisis of 1994, the value of the Peso against the US Dollar has been sliding. The decline has been gradual, benefitting foreign manufacturers who are buying in Dollars or Euros.
For manufacturers considering setting up shop in Mexico, the longtime trend presents competitive advantages over other countries. But it also brings concerns and complications that no manufacturer should ignore.
Now, the Trump administration is contemplating a substantial tariff on goods from Mexico. Economists think this policy ultimately may not have the desired effect however, as free market forces in Mexico will adjust over the long-run and prices for exports will re-stabilize, mitigating any effects of a tariff. Mexico’s advantages as a manufacturing location won’t just disappear overnight.
A newly released whitepaper examines this key area of concern in Mexico’s manufacturing sector.