Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Tariffs won’t stop soaring cross-border trade, expert says; Nestle investing $1B in Mexico to boost production; Polar Leasing Co. plans Texas distribution hub; and German equipment manufacturer opens $20M plant in northern Mexico.
Tariffs won’t stop soaring cross-border trade, expert says
Even with President Donald Trump slapping 25% tariffs on imports from Mexico and Canada, trade among the three countries will continue to grow, experts said.
Trump signed an executive order Saturday to impose the tariffs on Mexico and Canada, along with an additional 10% tariffs on goods from China. Canadian energy imports will only be tariffed at 10%.
The duties on all three countries will be fully in force by Tuesday.
“Based on what I see from our own customers, they’re all talking about growth, expansions and taking on additional markets, or just increasing capacity,” Jose Minarro, managing director for 3PL Sunset Transportation’s operation in Laredo, Texas, told FreightWaves in an interview. “That is benefiting us because they’re converting all of their manufacturing facilities in Mexico just to produce goods, and they’re using us in Laredo as warehouses for distribution.”
St. Louis-based Sunset Transportation has seven locations across the U.S. and one in Mexico. The company offers transportation, logistics and TMS solutions.
Minarro said Trump’s tariff threats haven’t slowed cross-border trade in Laredo.
“The year started at a normal pace, no slowdowns, not even because of all of the political noise; nothing that we’ve seen on the day-to-day operation represents what we’re hearing out there. It’s business as usual,” Minarro said.
Trump said the tariffs are aimed at pressuring Mexico and Canada into negotiations on migration, drug smuggling and reforms to the United States-Canada-Mexico Agreement.
Mexico and Canada are the top two trading partners of the United States.
From January through November 2024, U.S.-Mexico trade totaled $776.05 billion, a 6% year-over-year increase compared to the same period in 2023.
Trade between Canada and the U.S. totaled $699 billion for the first 11 months of 2024, a 2% year-over-year decrease compared to the same period in 2023.
Jorge Gonzalez Henrichsen, co-CEO of The Nearshore Co., said he doubted that Trump’s tariffs on Mexican and Canadian imports will be in place for long.
The Nearshore Co., based in Brownsville, Texas, is an international trade and development firm that helps companies set up shelter operations in Mexico.
“There is little to gain from tariffs, as neither American companies nor consumers would benefit,” Henrichsen told FreightWaves in an email. “The deep economic ties between Mexico and the U.S. are too strong, and I am confident that decision-makers in Washington understand this reality. My optimism is shared by the companies I work with — none of which have any plans to leave Mexico.”
With all the uncertainty around cross-border trade, Minarro advised shippers to talk with people who work in trade to make sure they have reliable information.
“I would strongly recommend talking to their logistics and customs brokerage partners as far as what’s really going on and how to really prepare for potential tariff increases, or any other thing that our two governments are thinking of to make things harder,” Minarro said.
He said for trade growth to continue expanding among Mexico, Canada and the U.S., infrastructure and communication need to improve.
“On the Laredo side, we’re also missing a lot of connectivity and investments, because once those 16,000 to 18,000 tractor-trailers cross the border every day, Laredo is becoming very crowded, like the existing local highways, and connecting highways, just to move stuff,” Minarro said. “Then to go back and forth between the World Trade Bridge and the warehouses and then the interstate to go up north, that can collapse very easily with just little things nowadays. I think on both sides that investments can’t stop, and have to be something that the governments keep talking about. If they are not investing, it’s going to hurt big time the efficiency of the border.”
Related: Crime, labor top concerns about nearshoring in Mexico
Nestle investing $1B in Mexico to boost production
Packaged food giant Nestle plans to invest $1 billion in Mexico over the next three years to ramp up production of various products.
According to a video posted on social media, President Claudia Sheinbaum said the investment is part of “Plan Mexico,” a government initiative aimed at replacing Chinese imports and boosting domestic production to strengthen both the Mexican and North American markets.
The investment includes expanding production capacity at Nestle plants in Veracruz, Guanajuato, Queretaro and the state of Mexico, as well as developing a new distribution center.
Vevey, Switzerland-based Nestle was founded in 1866. The company is one of the largest food and beverage companies in the world. It operates in 191 countries and has been in Mexico since 1935.
Polar Leasing Co. plans Texas distribution hub
Polar Leasing Co. Inc. has begun construction of a 12,800-square-foot distribution center in Temple, Texas.
The distribution center will be strategically positioned to service the company’s customers and freight partners located in the Southwest and central portions of the U.S., according to a news release.
The Fort Wayne, Indiana-based company provides electric, outdoor rental walk-in freezers and refrigeration units. The company did not provide a timeline for the Texas facility’s completion.
Polar Leasing Co. was founded in 2002 and has nearly 100 distribution facilities in the U.S.
German equipment manufacturer opens $20M plant in northern Mexico
Industrial equipment maker Ziemann Holvrieka has opened a manufacturing facility in the Mexican city of Ramos Arizpe.
The $20 million factory will create 150 jobs and produce stainless steel tanks and components for the North American food and beverage industry.
The facility is Ziemann Holvrieka’s first operation in Mexico. Ramos Arizpe is about 180 miles from Laredo, Texas.
Ludwigsburg, Germany-based Ziemann Holvrieka was founded in 1852. The company has production facilities in seven countries.
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