The United States imports a significant amount of goods from countries like China, Germany, and Japan, which do not have a free trade agreement (FTA) with the U.S. Despite the considerable distance separating these countries from the U.S., they remain key players in global trade. However, this presents certain disadvantages:

1. Greater geographic distance: The distance between the U.S. and these countries is substantial.
   This translates into longer shipping times and higher transportation costs, affecting the agility and responsiveness of supply chains.

2. No FTA: Without a free trade agreement with the U.S., products imported from these countries may be subject to tariffs and additional taxes, further increasing import costs.

Mexico: A Competitive Solution

Mexico, on the other hand, has several key advantages that make it an ideal choice for nearshoring:

• Geographic proximity: Sharing a border with the U.S., shipping times between Mexico and the U.S. are significantly shorter, reducing logistics costs and delivery times.

• NAFTA/USMCA: Mexico has a Free Trade Agreement with the U.S., allowing goods to be exchanged without tariffs, resulting in lower import costs compared to countries like China, Germany, and Japan.

• Competitive labor force: Mexico offers a skilled and cost-competitive workforce, along with a strong manufacturing infrastructure.