Monterrey has grown wealthy on North American free commerce. Industrial parks catering to among the world’s greatest firms line the six-lane freeway to the airport, whereas town’s glossy high-rises sprawl throughout an ever-increasing space between the mountains.
The regiomontanos, as native persons are recognized, are hard-headed and entrepreneurial, or as one govt mentioned: “While others cry, we sell the handkerchiefs.” Some admire President Donald Trump’s pro-business, anti-woke line.
So Monterrey’s enterprise leaders imagine they will climate Trump’s threats to upend the free commerce deal linking Mexico, the US and Canada.
Julio Escandón, chief govt of Banco Base, a neighborhood financial institution, mentioned he had not seen a drop in demand for loans. “What I pick up from conversations with business people who work with foreign companies here . . . is that it’s not going to happen,” he mentioned of Trump’s threats of across-the-board tariffs.
Tariffs focused at specific sectors have been doable, he added, “but an across-the-board 25 per cent tariff . . . is unsustainable in the medium to long term”.
Trump introduced tariffs of 25 per cent on all Mexican and Canadian imports on February 1, then paused the transfer for a month after the leaders of each nations promised on the eleventh hour to beef up border safety and crack down on drug trafficking.
On Sunday, Trump made a contemporary transfer, pledging a 25 per cent tariff on all metal and aluminium imports, together with from Mexico.
But enterprise leaders in Monterrey, the place producers make all the things from Lego to televisions to automobile elements for export, are quietly assured that the financial logic of North American free commerce will prevail.
Mexico is now the US’s greatest buying and selling companion, exporting $500bn value of products north final yr.
Mexican chief executives declined to be quoted by title on the delicate matter of US tariffs, preferring to defer to the federal government whereas negotiations with Washington proceed. However a enterprise lobbyist within the metropolis famous: “We’ve been through a Trump administration before.”
She recalled that in his first time period, the US president vowed to shut the Mexican border, then relented when Mexico took the powerful line he wished on migration. “We will have frights from time to time, but in the end Mexico is the country which matters most to the US, and Trump knows that.”
Emilio Cadena, chief govt of Prodensa, which helps overseas firms arrange manufacturing in Mexico, mentioned that whereas some firms have been in “wait and see” mode, most traders have been pushing forward with their plans. Sure firms, he mentioned, have been considering of shifting manufacturing to the area and investing in each the US and Mexico. “Mexico is an enabler of the re-industrialisation in the US,” he mentioned.
One speaker at a latest US Chamber of Commerce convention within the metropolis even joked that “Trump was the best president Mexico ever had”, referring to the comparatively strong funding Mexico attracted throughout his first time period, mentioned an individual who attended.
Trump’s early strikes in his second time period have nonetheless prompted a level of concern. “Nobody expected Trump to go this close to imposing tariffs,” mentioned a Monterrey financier, noting that the US president went so far as signing the chief order to implement duties, earlier than giving Mexico and Canada a short lived reprieve.
Juan Carlos Baker, a Mexican former commerce negotiator, mentioned Trump’s focus in his second time period talks with Mexico “is different to the first term, when Trump wanted to destroy Nafta”, the North American Free Commerce Settlement that was changed by the present USMCA deal.
“Now tariffs are a punishment, and I fear that in the future the level of tariffs will depend on whether Mexico does what the US wants on migration, security and fentanyl. This can be very subjective.”
Some executives mentioned their companies would survive even when Trump finally imposed larger tariffs on Mexico. Labour prices in Texas are a number of instances larger than these in Mexico, which Mexicans imagine provides their nation a permanent aggressive benefit.
The typical manufacturing wage in Nuevo León state, the place Monterrey is the capital, is round $33 per day, in response to state authorities information; in Texas it’s about $292 a day, in response to the Federal Reserve Financial institution of St Louis.
“All the US business people are lobbying Trump not to tear up their supply chains,” mentioned the Monterrey financier. “They are our allies.”
Not everybody shares the optimism of the regiomontanos. Some 900km additional south in Mexico Metropolis, these immersed in politics are apprehensive. “Just because there’s strong economic logic to maintaining North American free trade doesn’t mean that’s what Trump will do,” mentioned one former Mexican official. “Populists don’t always follow economic logic.”
Some Monterrey enterprise folks imagine that US stress on Sheinbaum for outcomes towards the murderous drug cartels may assist Mexico if it improves safety. However their principal concern is convincing Trump that he ought to see Mexico as an ally within the struggle towards his greatest enemy, China.
Banco Base’s Escandón believes Trump will find yourself being swayed by the argument that China is a a lot larger downside for the US. US firms which have the president’s ear, comparable to Elon Musk’s Tesla, know that “the only way to compete with China is to put a plant in Mexico”, he mentioned.
Máximo Vedoya, president of the Caintra trade foyer in Nuevo León, mentioned Trump was proper to boost the problem of unfair Chinese language commerce competitors.
However he added: “Why take action against Canada and Mexico when the common enemy is China? Integrated North American value chains are the best way to combat China. If we lose that supply chain, the jobs won’t go to the US, they will go to countries like India, Vietnam and Malaysia.”
Knowledge visualisation by Alan Smith and Ray Douglas
