Borderlands Mexico: Tariffs forcing nearshoring, regional sourcing, experts say

Panel moderator Jonathan Gold, NRF’s vice president of supply chain and customs policy, opened the discussion by emphasizing a fundamental but often overlooked point: “A tariff is a tax paid by the American importer.”

“For starters, I really want to try and adjust the current state of trade and tariffs,” Gold said. I know everyone’s head is spinning from the constant social media posts about the new tariffs, which are usually followed by official guidance notices a few days later. “I understand that this makes it very difficult for companies to plan and prepare for tariff changes that seem to be happening almost immediately.”

Board members described tariff management as a round-the-clock challenge for customs teams and brokers.

Pete Mento, director of customs and international trade at DSV Global Transport, said the constant changes in rules had created a never-ending stream of reclassifications, regulatory reviews and recalculations of prices.

He warned that customs brokers face increased scrutiny and increased workloads as importers seek clarity on rapidly changing tariff schedules.

“For an importer, they depend on a broker for that type of advice. They have to depend on a broker for that type of advice, and a broker has to provide it. You don’t want to make a mistake,” Mento said.

“The man-hours added to an entry, the amount of extra time, and then just when they’re getting in sync with everything, the constant changes, it’s very difficult. I tell everybody, hug a pimp, right? You know, I know I could use that. Hug a pimp and tell them you appreciate what they’re doing because it’s been positive and ridiculous.”

Chris Borzani, Igloo’s director of international procurement and compliance, said tariffs and constant pricing changes made it difficult to inform leadership.

“One of the biggest challenges is actually communicating that information to leadership, because I know that information changes quickly. I find myself writing an email, and in the middle of the email, I get a notification that tariffs have either increased or decreased,” Barzani said.

The legacy systems weren’t built to handle tiered tariffs — relying on brokers to manually apply additional duties to tens of thousands of entries a year, said Christopher Smith, who leads customs and trade advisory efforts for IKEA North America.

“When you’re doing close to 80,000 entries a year, that’s a big reliance on your broker,” Smith said. “The other big thing I would say is trying to manage management expectations, especially with tweeted information, where it’s informal and … maybe weeks or months of hope. You walk in in the morning to get an email, ‘What does this tweet mean for us?’ Nothing yet, because until I get the actual information into the Federal Register so I can do an analysis of the impact.”

Panelists say many companies have spent years absorbing tariff costs before passing them on to customers — but those strategies are running out.

For example, IKEA now anticipates more than $400 million in additional costs related to tariffs this year in the US market alone.

“It can take more than two years to introduce a new supplier, so we haven’t seen a major change in the supply chain,” Smith said. We are seeing that now that things have settled down a bit with the current reciprocal tariff rates. But we are actually looking at possible changes to Europe due to the agreement between the US and Europe. “We’re actually getting terrible questions from some of our buyers in simulating our land costs because they’re not used to seeing Europe land better than Asia.”

Meanwhile, Igloo described shifting production from China to Cambodia, Thailand and, increasingly, the U.S. While alternative sources have helped ease some of the burden, new tariffs on Southeast Asian goods mean “there is no longer a safe harbor.”

Barzani said: “I feel that there is no safe space at this stage. It just tries to reduce these tariffs as much as possible. One thing I would suggest is to try to develop relationships with your vendors. If you have some in China, they may have a plus one or a sister company in Cambodia or Thailand. You might want to really focus on these types of relationships, and they have their downsides as well.”

Borzani said one of the biggest challenges of outsourcing to Cambodia is ship scheduling.

“I’ve worked with several ocean carriers that are opening up new trade routes to focus more on Cambodia, these South and Southeast Asian countries,” Barzani said.

Mento said recent US government trade policies show a push to isolate China economically and encourage regional North American manufacturing under the USMCA. But resourcing is time-consuming and complex: labor capacity, parts availability and transportation infrastructure in Southeast Asia often lag behind China.

Mexico, however, is emerging as the strongest nearshore winner — Chinese manufacturers themselves opened new plants there to maintain access to the U.S. market, according to Mento.

“Mexico has become a sneaky favorite,” Mento said.

Panel members also warned that US Customs and Border Protection is relying heavily on artificial intelligence-based enforcement, including automated audits and transaction reviews.

CBP is now issuing more CF-28 requests – used by CBP to request factual information from the importer. and publishing the names of companies that are infringing – a major shift in enforcement visibility.

This means that companies that rely on duty paid arrangements (DDP) with overseas suppliers may face increased legal fees if valuations, country of origin declarations or supplier information are incorrect.

“Commercial compliance is a priority,” Mento said. “Now that’s about keeping your company’s name out of the paper.”

Kuehne+Nagel expands cross-border capacity in El Paso, Texas

Kuehne+Nagel, the world’s largest 3PL, has expanded its cross-border logistics footprint in El Paso, Texas, adding a 217,431-square-foot facility next to its current site to support growing U.S.-Mexico trade flows.

According to a news release, the new warehouse includes 53 dock doors, 65 trailer spaces, cross berth capabilities and vertical rack storage to handle increased northbound and southbound shipping volumes amid continued nearshore demand.

The company said its previous 362,992-square-foot facility reached full capacity within a year, underscoring the need for scalable growth at the border.

Headquartered in Switzerland, Kuehne+Nagel has more than 80,000 employees at 1,300 locations in 100 countries.

Motherson invests $50 million in Mexico factory to supply Audi

India-based auto parts supplier Motherson Group will invest $50 million to expand its factory in Zitlaltepec, Tlaxcala, Mexico, adding a new paint area and six injection molding machines to produce parts for Audi’s Q5 and EQ7 models, Mexico Business News reported.

The project is expected to create 150 direct jobs and 300 indirect jobs, with construction scheduled for completion between April and July 2026.

State officials said the investment will increase regional manufacturing capacity and support local employment, with hiring slated to begin in the second quarter of 2026 through job fairs and digital platforms.