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What Is Nearshoring?
Have you heard this one before? COVID disrupted lots of things – and global trade is one of the biggest. Now, after decades of offshoring production and services, pandemic disruptions and shifting geopolitics have businesses rethinking their supply lines. So as we gather margarita ingredients for Cinco de Mayo, we’ve got nearshoring on our minds.
Nearshoring involves bringing supply chains and manufacturing closer to home, potentially lowering companies’ shipping costs and mitigating risks associated with long supply chains and growing global competition. As friendly neighbors, Canada and Mexico already top our list of trading partners, and they may stand to benefit from the new trend even more.
To the north, Canada boasts a strong auto sector, and they hope to create a mining and electric vehicle industry that’s integrated with the U.S.
To the south, Mexico offers a comparatively cheap labor force and benefits from free trade partnerships with the U.S. and Canada. Companies have noticed: Demand for industrial space is on the rise, and the Mexican government reported that more than 400 companies expressed interest in shifting production to Mexico.
While there are still hurdles to overcome, we may see North American trade grow even stronger.
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