Chinese Manufacturers Get Around US Tariffs With Some Help From Mexico

Source: Bloomberg

9/14/2022

When César Santos was growing up in the 1960s, he spent his weekends surrounded by horses and cattle on his father’s ranch outside Monterrey, Mexico. Today, a red monolith emblazoned with the words “Hofusan Industrial Park” announces that the patch of dusty wasteland has a new purpose.

Located in a prime spot between Mexico’s industrial capital and the US border, Hofusan has become a haven for Chinese manufacturers looking to sidestep US tariffs and shorten supply chains that have been strained to a breaking point during the pandemic. The 11 plants and warehouses on the 850-hectare (2,100-acre) estate are part of the latest chapter in Chinese capitalism: The country dubbed the world’s factory now also exports white-collar managers to set up and run operations in places such as Vietnam, Thailand, and Mexico.

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