Borderlands Mexico: Tariffs could lead Mexico into recession, report says
Mexico's economy could be the most affected by an escalating global trade war, leading the nation into a recession by the end of the year, the Organization for Economic Cooperation and Development says in a report.
The OECD's 'Interim Economic Outlook,' released Monday, predicted Mexico could fall into a recession with a 1.3% contraction in GDP in 2025. That compares to a GDP growth forecast of 1.2% the OECD estimated in a report released in December.
'The overall picture is one of generalized downgrades partly because of trade uncertainty and economic policy uncertainty, but also the imposition of tariffs,' Alvaro Pereira, the OECD's chief economist, said during a news conference on Monday. 'We're already seeing high trade uncertainty and economic policy uncertainty. This is already having an impact on confidence. We have downgraded almost every single country.'The OECD, based in Paris, has 38 member countries – including the U.S., Canada and Mexico – that promote economic growth and sustainable development through public policies.
Its latest economic forecast hinges on the Trump administration going forward with 25% tariffs on imports from Canada and Mexico, as well as implementing broad reciprocal tariffs on other nations on April 2.
The tariffs could 'sap confidence and add to the downward pressures on corporate and household spending around the world,' the OECD said in its latest report.
Mexican President Claudia Sheinbaum said her administration does not anticipate a recession.'They think we're not going to do anything in the face of an international situation, but we work every day to address that situation. We don't have that expectation because we have a plan and we're working to strengthen the economy from the bottom up,' Sheinbaum said Wednesday during her daily news conference.
As of Thursday, outbound truck volumes out of Laredo, Texas, are up compared to last year but down significantly compared to the same periods in 2023 and 2022, according to the SONAR Outbound Tender Volume Index (OTVI.LRD).
The Laredo port of entry is the No. 1 international gateway for trade between the U.S. and Mexico, though it was ranked No. 4 overall in the nation in January, the port of entry's lowest ranking since 2018.
Trade at Port Laredo totaled $27.9 billion in January, an 11% year-over-year increase.
President Donald Trump has already imposed 25% tariffs on all steel and aluminium imports from all countries, along with a 20% duty on Chinese goods.
Canada and Mexico could face broader 25% tariffs on April 2 after a roughly 30-day pause was announced March 6.
For the past 17 days, importers weren't required to pay tariffs on imports from Canada and Mexico that adhered to the United States-Mexico-Canada Agreement.
Trump has called April 2, when the tariff policy is to be revealed, 'Liberation Day,' and would include broad reciprocal tariffs to match duties that other countries charge on U.S. imports.'April 2nd is Liberation Day in America!!! For DECADES we have been ripped off and abused by every nation in the World, both friend and foe. Now it is finally time for the Good Ol' USA to get some of that MONEY, and RESPECT, BACK. GOD BLESS AMERICA!!!,' Trump posted on Truth Social on Friday.
The OECD's growth projection for Canada was also lowered. The forecast is for only a 0.7% increase in GDP in both 2025 and 2026, down from a previous forecast of 2%.
China's economy will grow by 4.8% this year before slowing to 4.4% in 2026, the OECD said.
Growth in the U.S. has also been downgraded: 2.2% expected this year and 1.6% in 2026, down from previous forecasts of 2.4% and 2.1%, respectively.
Supply chain services provider Echo Global Logistics has expanded operations in Mexico City to support cross-border customers.
The Chicago-based company opened its first office in Mexico City in March 2024 and named Troy Ryley president of Echo Mexico.
'We're excited to continue to develop our cross-border solutions with the opening of our Mexico City division headquarters,' Doug Waggoner, Echo's CEO, said in a news release.
Echo Global Logistics also has locations in Monterrey, Mexico, and Laredo, Texas. The company now has 29 operations across the U.S. and Mexico.
In addition to Laredo, Echo has Texas operations in Houston and Dallas.
Atlanta-based Americold has acquired a 10.7 million-cubic-foot cold storage warehouse in Cedar Port Industrial Park in Baytown, Texas.
The facility was acquired for $127 million and adds 35,700 pallet positions to Americold's cold storage warehouse portfolio.
'The catalyst for this acquisition was the award of a large grocery retail contract with one of the world's largest retailers,' George Chappelle, CEO of Americold, said in a news release.
Baytown is 29 miles southeast of Houston.
Americold (NYSE: COLD) owns and operates 239 temperature-controlled warehouses around the world, and manages approximately 1.4 billion refrigerated cubic feet of storage space internationally.
Mexico's National Independent Union of Automotive Industry Workers announced an agreement for wage increases of up to 10.25% at the General Motors plant in Silao, Mexico, according to El Economista.
Workers in four categories who make up more than 60% of the plant's workforce will receive a 10.25% raise, while the remaining 40% will get 9.25%.
The GM plant in Silao produces Chevy Silverado and GMC Sierra pickup trucks. The factory employs 8,745 workers, according to the union.
The 2024 average wage in Mexico for an unskilled factory laborer is around $4.18 per hour, according to Tucson, Arizona-based Tetakawi, a provider of services for foreign manufacturing companies in the country.
The post Borderlands Mexico: Tariffs could lead Mexico into recession, report says appeared first on FreightWaves.
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