The scene in a Mexico City office was telling. Meeting with Chinese corporates including electric vehicle (EV) manufacturers, global bank executives noticed an interesting shift in ambition. These companies, once focused solely on exporting to the US, were now viewing Mexico as a springboard for the entire Americas region.
“What was really interesting, which I didn’t appreciate until I was in Mexico, was that many Chinese corporates have invested in coverage out of Mexico for the Caribbean, Central America and South America,“ says Atul Jain, global co-head of trade finance and lending at Deutsche Bank. “As much as we talk about this as a China-Mexico into the US corridor, actually the weight of business for many of these corporates is China-Mexico into everything southward.“
This shift exemplifies the fundamental rewiring of global trade. The once-dominant US-China trade corridor, worth approximately $700 billion, has been fundamentally reshaped by tariffs that have increased three- to six-fold during the past seven years. While US imports from China have declined, this reduction has been almost perfectly offset by increased imports into Asean countries from China.
