Mexico Strengthens Its Position Over Vietnam in the U.S. Market Following New Trade Agreement

The export rivalry between Mexico and Vietnam has long been a constant factor in accessing the U.S. market, especially in key sectors such as manufacturing, automotive, and electronics. Traditionally, Vietnam has taken advantage of its low labor costs and expansive trade policies to boost its exports to its northern neighbor. However, recent adjustments in U.S. trade policy are reshaping the landscape, giving Mexico a significant edge.

According to statements from Secretary of Economy Marcelo Ebrard, the new bilateral agreement between the United States and Vietnam imposes significantly higher average tariffs on Vietnamese products—ranging between 35 and 40 percent. In contrast, Mexican exports to the same market will face an average tariff rate of just 6 percent. Ebrard notes that this differential represents a “six to one” advantage for Mexico over one of its main competitors in North America.

This shift is part of a growing trend in which the United States tailors its tariff policies based on strategic alliances and trade balances. The agreement with Vietnam marks the first time Washington has signed such a treaty with a nation with which it maintains a trade deficit, highlighting both the challenges of global commerce and the search for mechanisms to protect domestic U.S. production without compromising its closest allies.

Despite the recent approval of a tax reform in the United States—championed by former President Donald Trump—aimed at reducing corporate profit taxes, Mexican officials believe this change will not diminish companies’ interest in relocating to Mexico. According to Ebrard, while there may be accounting incentives to shift certain administrative operations northward, Mexico’s proximity, lower logistics costs, and manufacturing competitiveness will continue to attract investment into the country.

In this context, the relocation of supply chains—known as nearshoring—remains a key driver of the current Mexican economy. Stable tariff rates and deep integration under the USMCA bolster the confidence of foreign investors and U.S. manufacturers in Mexico as a strategic hub for North America-oriented manufacturing.

Looking ahead, the consolidation of tariff and logistical advantages could translate into sustained growth in Mexican exports and greater investment inflows, even though the global outlook remains subject to shifts in U.S. trade policies and changes in international relations. Maintaining competitiveness will also require progress in infrastructure, workforce training, and regulatory certainty—areas that both the government and the private sector will need to strengthen to fully capitalize on this new environment.

In summary, recent changes in U.S. trade policy enhance Mexico’s position as a key supplier to the United States, especially compared to Asian competitors like Vietnam. Although the international context remains dynamic and presents challenges, Mexico currently enjoys favorable conditions to further its economic integration under the USMCA and solidify its role in the region.