Nearshoring to Mexico and US Supply Chain Resilience as a Response to the COVID-19 Pandemic

Abstract

The COVID-19 pandemic prompted global supply chain upheavals, triggering shortages and delays. Governments and companies sought resilient strategies for future crises. A US response was “nearshoring,” shifting manufacturing from China to Mexico. Analyzing trade data from 2019 to 2023, this study examines if this shift occurred and its sectoral impact. Both countries initially rebounded post-Q1 2020 disruptions. However, China’s exports waned, while Mexico’s surged, surpassing China by March 2023. Sectors like machinery and electrical components showed similar trends. Mexico excelled in US supply, while China’s dominance eroded, affirming the nearshoring hypothesis. Proximity significantly bolstered long-term supply chain resilience.