Manufacturers I work with called me this morning asking, 'Should we shut down our facilities?'
Recent tariff announcements and near-daily developments by the Trump admin have sent ripples of fear and panicked responses through North American manufacturing circles. According to some experts, manufacturers can't make clear moves until the plan plays out over the coming months. In the meantime, the world waits and watches as Trump's tariffs (and their immediate changes) could be used as strategic and performative measures to anchor Trump’s wider agenda.
Javier Mr. Nearshoring® Zarazua, Managing Partner at JL Nearshoring Mexico, believes Trump's approach to tariffs represents a calculated effort to reshape regional trade dynamics rather than an all-out trade war.
Short-Term Pressure on Mexico and Canada: "I predicted that Donald Trump would impose tariffs on China, more than he would impose on Mexico and Canada," says Zarazua. "I actually predicted anywhere from five to 10 percent for Canada and Mexico, and upwards of 20 percent for China."
Zarazua quickly cites that Secretary Ludnick said Trump may remove tariffs on Mexico and Canada, suggesting a possible shift in policy and that aligns with his prediction that tariffs on Mexico and Canada may be short term measures.
He interprets the tariffs on Mexico as leverage to address security concerns rather than trade imbalances. "He wants to take down the cartels, which the majority of Mexicans agree with," Zarazua explains. "I think he's just doing it to prove that he's willing to use tariffs if he doesn't get what he wants on security cooperation."
Manufacturers in limbo: The uncertainty has created significant anxiety among manufacturers. "Manufacturers I work with called me this morning asking, 'Should we shut down our facilities?'" Zarazua recounts. His advice remains measured: "I told them to wait one month, until the 2nd of April. That's when Trump could announce his master plan."
Zarazua believes Trump's strategy will become clearer in the coming months, noting that the president "has already said he was going to announce his comprehensive trade plan within 100 days, as he wanted to visit China within that timeframe."
Four-point approach for businesses: For companies navigating upheaval in supply chain, Zarazua offers a four-point strategy:
"First, don't panic," advises Zarazua. "Second, make informed decisions and understand what is actually happening. Third, develop planning scenarios—what happens if tariffs stay for one year? What if they disappear in one month? Finally, ensure you have a plan for each of those scenarios."
You can accuse Trump of many things, but he's consistent. He firmly believes that the US has been taken advantage of from a trade standpoint.
Broader strategy: Looking at the bigger picture, Zarazua sees method in what some perceive as madness. "You can accuse Trump of many things, but he's consistent," he observes. "He firmly believes that the US has been taken advantage of from a trade standpoint."
The ultimate goal, according to Zarazua, is reshoring manufacturing to the United States. "Manufacturing bases that were once in the United States, and he wants to bring them back. He wants to level the playing field."
However, he adds a note of realism: "Being realistic, he can only bring back high-value industries like semiconductors," he notes. Such sectors represent "perfect candidates for reshoring, offering high-paying jobs and significant economic value."
Predicted Outcome: Zarazua's forecast suggests a strategic differentiation in tariff policies: "I believe we'll see 20 percent more tariffs on China, with no tariffs or low percentages—maybe 5 percent—on Mexico and Canada."
This approach, he believes, would allow Trump to "use that tariff revenue to lower taxes for companies relocating to the United States" and develop "a stronger manufacturing base," though he acknowledges it "will not match the combined manufacturing capacity of China, Mexico, and Canada."
As manufacturers across North America navigate tariffs with understandable uncertainty, Zarazua’s parting advice remains pragmatic: "You need to be creative and figure out workable solutions to these challenges."
