What Auto Manufacturers Need to Know About Mexico Under the USMCA

Mexico and USMCA

Building upon the centuries-old business relationship between Mexico and the United States, NAFTA allowed both countries to benefit from a seamless workshop that clearly made the pie larger. The 25-year-old contract needed to be revised, though, with motor vehicles and auto parts taking the lion's share of the modifications (for better or worse depending on how well your company coordinates upstream and downstream operations and record-keeping).

Mexico's economic relevance to the United States is frequently overlooked. The 11th largest economy in the world, Mexico has a population (126 million) roughly 40 percent that of the U.S. and is close to three times the size of Texas. The country has a network of 12 Free Trade Agreements (FTAs) with 46 countries, and seven additional ones will be added with the renewed Trans-Pacific Partnership (an agreement now known as CPTT, Comprehensive and Progressive Agreement for Trans-Pacific Partnership, TPP 11 in short), from which the U.S. withdrew under the Trump Administration.

Mexico was, in 2018, either the first or second largest export market for more than 50 percent of states in the Union. (It was first for six states –Arizona, California, Kansas, Nebraska, New Mexico and Texas, and second for 22 States–Colorado, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, and Wisconsin.) It is also the third-largest source of imports in the U.S.; has an expanding middle class that has grown accustomed to purchasing American goods and services; has demonstrated to be a near-shore, reliable manufacturing partner; as well as will benefit from a demographic bonus during the next several years that will help neutralize the dwindling U.S. population (and necessarily its workforce).

Read full article here.

Making the Autonomous Supply Chain a Reality

Supply chain

Supply chains are evolving in the face of greater customer demand, soaring expectations, and endless purchasing opportunities. Retailers, manufacturers and third-party logistics companies are having to move quicker and produce more with shorter turnarounds and greater transparency. Companies are digitizing their supply chains to meet these new challenges, but this alone isn’t enough to answer the questions businesses are asking every day: what’s going to happen tomorrow, next week, next month and next quarter?

An autonomous supply chain can help businesses respond with immediacy and decisiveness. This technology is designed to deliver on-demand, navigate disruptions months in advance and help keep your business ahead of any changes in customer buying behavior. The three core tenants for an autonomous supply chain are:

Reading the signals

The more information a business has access to and uses, the more it can help understand any changes in supply and demand. In the past, the main challenge was having the processing capability necessary to collect reliable data and harness it to represent the realities of changing conditions. The capacity to measure and recognize external conditions is critical to predicting supply and demand. The autonomous supply chain requires a significant increase in external signals, which relies on the reporting of evolving climate and market conditions in real time.

So how can you read the signals? Using artificial intelligence (AI), machine learning (ML) and IoT, you can manage and interpret signals such as weather events, temperatures jeopardizing fresh products and any online social trends influencing customer demand. Businesses need to make use of as many signals as possible, because if dimensions are missing it will difficult to get a clear picture.

It sees everything

To truly understand their entire supply chain, businesses need to manage the complexity and volume of intelligence — billions of pieces of information that are time-stamped with their own varying amounts of information. Let’s set the stage: imagine sensors inside a lorry, which is on its way to deliver fresh goods to a grocery retailer. Sensors are able to detect the temperature inside and outside of the lorry, the speed it is travelling at, and if there are any road works which will slow the delivery down. Every detail is pinpointed with time and date stamps.

Read the entire article here.

In Blow to Trump, America’s Trade Deficit in Goods Hits Record $891 Billion

America’s Trade Deficit

WASHINGTON — America’s trade deficit in goods with the rest of the world rose to its highest level in history last year as the United States imported a record number of products, including from China, widening the deficit to $891.3 billion and delivering a setback to President Trump’s goal of narrowing that gap.

The increase was driven by some factors outside Mr. Trump’s control, like a global economic slowdown and the relative strength of the United States dollar, both of which weakened overseas demand for American goods. But the widening gap was also exacerbated by Mr. Trump’s $1.5 trillion tax cut, which has been largely financed by government borrowing, and the trade war he escalated last year.

It is a case of textbook economics catching up with some of Mr. Trump’s unorthodox economic policies. Economists have long warned that Mr. Trump’s tax cuts would ultimately exacerbate a trade deficit he has vowed to reduce, as Americans, flush with extra cash, bought more imported goods.

His trade war with Beijing also widened the gap: Stiff tariffs on Chinese goods helped slow China’s economy, crimping American exports, which declined nearly 50 percent in December from the same month a year before.

"All countries run trade deficits whenever they consume more than they produce,” said Kimberly Clausing, an economist at Reed College in Oregon. “And when we borrow to finance tax cuts, like we did with the Tax Cuts and Jobs Act, we make these imbalances worse."

The trade deficit is the difference between how much a country sells to its trading partners and how much it buys. It generally includes both goods and services, though Mr. Trump has focused almost exclusively on the deficit in goods. He has long boasted that his trade policies would reduce that gap, which he views as a measure of whether partners like China and the European Union are taking advantage of the United States, a diagnosis few economists share.

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Doing Business in Mexico

NAFTA

NAFTA boosted the centuries-old business relationship between Mexico and the United States by allowing both countries to benefit from a seamless workshop that undoubtedly made the pie larger. As with any 25-year-old contract, however, NAFTA needed to be revised. Negotiations required delicate balancing between technical and political issues, with motor vehicles and auto parts requiring the lion´s share of the modifications.

In this article, we take stock of the revised agreement and, at the same time, look ahead at what the 2019 business calendar may bring in Mexico through the following top four issues:

  1. The (possible) execution of the US-Mexico-Canada Trade Agreement (USMCA), and what it means, particularly, for motor vehicles and auto parts manufacturing and sales in North America
  2. The newly elected (2018-2024) Lopez-Obrador administration
  3. New Product Safety Requirements and Recall Procedures
  4. The New Mexican Anti-corruption Law

Read the entire article here.
Originally publish in The National Law Review.

Ventus Global Logistics has 30 years of experience providing freight and distribution services for international companies that do business in Mexico. Contact us today to find out how Ventus Global Logistics can facilitate seamless import and export of your goods across North America.

Mexico Trade Spurs Largest Regional Spec Build

Laredo, TX

Laredo, TX is the third largest port in the U.S. after Los Angeles, and New York City and 60% of U.S. / Mexico trade occurs in Laredo, TX. Last year trade in Laredo surpassed $300 billion. This robust trade has driven the need for the largest regional class-A industrial spec space to be developed. It is no wonder why international companies are looking to Laredo to establish logistics operations.

Read the full article here.

Published in GlobeSt.com

We Launched a New Website!

Our new website provides a clear message of who we are, what we stand for and where our value lies when providing efficient logistics, freight, and custom broker solutions. The website also boasts a clean design and intuitive and consistent site-wide navigation system with improved menu functionality that directs you to the information most relevant to you. It is also fully responsive with mobile devices, making it easy to navigate on a wide range of web browsers and portable devices.

Amongst the new features the site contains are integrated social media buttons for Facebook, Twitter and Linkedin, and online chat to foster improved communication with our clients and future customers.

Our new blog provides a easy sign-up for periodic updates and access to articles that matter to you through smart topic filters.

We will be constantly updating our content with helpful information, articles, news, newsletters, company announcements and client successes in the Blogs section.

We hope you find the new website with a fresh look, easy to access information and we also wish to establish this portal as a source of information for those who visits our site.

For any questions, suggestions, feedback or comments, please E-mail us.

Thank you,
Ventus Global Logistics Team

About Ventus Global Logistics

With a track record stretching over three decades of reliable performance, we've established ourselves as the transparent, honest, experienced customs broker and logistics solutions provider for a wide range of businesses and industries in Mexico and the U.S. From web-based tracking and reporting systems to our bonded warehousing and ISO-9001-2015 certification, we hold ourselves accountable to our clients – and to a high standard of quality.