Can Mexico fill China’s shoes?

Mexico is well positioned to benefit if punitive US tariffs on China prompt a shift in US import demand towards other EMs, as seems likely, although its ability to ramp up exports in the near term will be constrained by some capacity constraints, particularly in the labour market. And the heightened uncertainty around US trade policy means that firms will be hesitant to make major investment in new production facilities, which will hold back growth in Mexico over the coming quarters.