Border boom: Mexico and U.S. auto trade breaks records
Record automotive trade surplus between Mexico and the United States
From January to September 2024, Mexico has achieved a record automotive trade surplus with the United States. This marks the first time the surplus has exceeded $100 billion. This achievement is the result of consistent year-over-year growth over the past decade, except during the COVID-19 pandemic. The surplus reflects a robust trade relationship.
East Coast labor strike
The East and Gulf Coast port strike is looming as the contract extension deadline of January 15, 2025, is quickly approaching. Both parties have yet to resolve the primary issue of automation. While automotive shippers heavily utilize the Trans-Atlantic trade lane, delayed shipments can rock critical component deliveries and disrupt production. Many carmakers are exploring alternative routes and adjusting schedules.
Deep integration of the North American automotive industry
The American Automotive Policy Council (AAPC) emphasizes the deep integration of the North American automotive industry. Mexican-made vehicles, on average, contain 35% U.S. content. Similarly, Canadian-produced vehicles incorporate 50% U.S. content. The USMCA agreement, implemented in 2020, further strengthens this integration by mandating a 75% regional content requirement for core automotive parts.
Tier 1 and OEM layoffs
As many manufacturers and suppliers work to cut costs and adjust to the changing EV and hybrid market through restructuring, thousands of employees across the globe have been laid off and factories have been closed.