Tariffs could redirect manufacturing to Mexico rather than U.S., says GlobalData

A fresh wave of US tariffs introduced in April 2025 is intensifying pressure on global supply chains—but companies operating under the United States–Mexico–Canada Agreement (USMCA) are getting a crucial reprieve.

Goods that meet USMCA’s regional content requirements remain exempt from these tariffs, offering a competitive edge to manufacturers sourcing and producing within North America. According to a new report from GlobalData, the exemption is already influencing trade patterns and consumer sentiment, particularly in Mexico and Canada, where concerns over inflation linked to tariffs have either stabilized or declined in recent months.

GlobalData’s recent report, “Industry Insights: The impact of tariffs on consumer packaged goods”, reveals which CPG-relevant sectors are most affected by tariffs within specific trade relationships and how companies within these sectors will be affected. It also provides insights into consumer reactions to changes in the market caused by the imposition of tariffs.

Rory Gopsill, Senior Consumer Analyst at GlobalData, comments: “Products manufactured in the US, Mexico, and Canada using materials sourced from North America are generally more likely to meet USMCA regulations and, as a result, may qualify for tariff exemptions. However, the situation becomes more intricate when raw materials are obtained from outside North America, known as ‘non-originating’ materials. To qualify as USMCA-compliant, these non-originating materials must not contribute more than 40% of the product’s transaction value or more than 50% of the net cost of production, as outlined by the US Trade Representative. Therefore, it is essential for companies to ensure that a significant portion of a product’s value and costs is derived from materials and processes sourced within North America.”

The exemption of USMCA-compliant goods was confirmed by the US when a raft of tariffs was announced in April 2025. This is likely to have contributed to concerns about tariffs’ inflationary impact not increasing significantly among Mexican consumers and decreasing noticeably among Canadian consumers between Q1 and Q2 2025 (according to GlobalData’s Q1 and Q2 2025 surveys). This reflects the positives that the exemption of USMCA-compliant goods could yield for the Canadian and Mexican economies.