US-China Tariffs Drove Export Boom and Job Growth in Mexico

The 2018/19 US tariff regime against China created a significant trade diversion effect, with Mexican exports and employment experiencing measurable growth as companies shifted production and sourcing patterns away from Chinese suppliers. This research from CEPR provides empirical evidence that trade policy interventions generate substantial and often overlooked secondary effects on neighboring economies integrated into North American supply chains.

For supply chain professionals, this underscores the critical importance of monitoring trade policy changes not just for direct impacts on their primary sourcing regions, but for cascading effects across integrated trade corridors. The Mexico-US-Canada supply chain ecosystem proved resilient and responsive to tariff pressures, demonstrating both the flexibility and fragility of regional sourcing networks when major tariffs are introduced.

Companies that anticipated these shifts and proactively rebalanced sourcing toward Mexico gained competitive advantages, while those that delayed faced both tariff costs and supply chain disruption.