01 / 22 / 25
New Trade Relationship Between Mexico and the United States: Challenges Businesses Will Face
MEXICO CITY, MEXICO, January 22nd, 2025 – What steps should we take within our companies if we have (or intend to establish) trade relations with entities located in the United States?
The trade relationship between Mexico and the United States has been one of the most important and dynamic on a global scale over the past decades, in 2023, Mexico became the United States’ first trading partner, with trade between the two countries amounting to approximately $746 billion that year, resulting in a trade surplus for Mexico.
Understanding the significance of this trade relationship—particularly given Mexico’s dependence on the North American market—and considering the actions of President Donald Trump during his first administration from 2017 to 2021, it is clear that the relationship between the two countries may face challenges starting January 20, 2025, when Donald Trump assumes the presidency of the United States once again. Potential impacts could arise in areas such as immigration, security and drug trafficking, diplomatic relations, and most notably, trade and the economy. These changes could particularly manifest through protectionist policies and reviews of the USMCA (United States-Mexico-Canada Agreement).
In this context, we can anticipate new rules and restrictions in the market stemming from these policies. This raises questions such as: What measures should we implement within our companies if we have (or plan to have) trade relations with entities in the United States, whether they are our own or third parties? How can we anticipate regulatory changes that might affect our business model? How should we communicate any issues we identify that could impact our operations?
We know there will be many questions, and unfortunately, we don’t have a crystal ball to predict what will happen. However, there are tools we can develop within our companies to gain visibility and, when necessary, anticipate internal and external factors or risks that may affect our daily operations. This is where compliance becomes relevant and plays a crucial role within the organization.
Among other tools, we can consider the following for our companies:
1. Implementation of a Compliance Management System
Viewing compliance management as a system enables us to analyze the business context, map the regulatory framework applicable to our operations, products, or services, and create a risk matrix, this system will allow us to quickly identify any regulatory changes and their potential impact or risks to our organization, enabling us to adjust accordingly to address changes in U.S. trade policy.
For this reason, companies must adopt a dynamic, preventive, and resilient approach to adapting quickly to new regulations. When implementing a management system, we should consider the following:
- Conducting a regulatory diagnosis to identify the real risks faced by our company in the regulatory environments of both Mexico and the U.S.
- Ensuring continuous updates by monitoring changes in tariffs, security regulations, labor laws, and other key standards.
- Taking preventive actions to anticipate challenges and avoid penalties.
By identifying and evaluating regulatory risks through the implementation of a compliance management system, companies can optimize their operations and adapt to the new demands of the market.
2. Building a Culture of Integrity
Beyond regulatory and legal compliance, every company or organization must cultivate and promote a culture of integrity (“tone at the top”) driven by its highest levels of leadership.
Having a culture of integrity is essential for building a solid reputation, particularly in the bilateral context with the United States, where expectations for business ethics are higher than in Mexico.
For a culture of integrity to mature and succeed, it requires:
- Ongoing 360-degree communication and training, involving employees, clients, and suppliers.
- Training employees to understand and adhere to codes, policies, processes, and formal reporting or whistleblowing channels.
- Leadership with integrity, promoting transparency and accountability from the top of the organization.
Companies that embrace integrity policies not only protect themselves from legal and reputational risks but also strengthen their image with clients and business partners, creating competitive advantages. Additionally, they become attractive to talent seeking to work for companies aligned with their values and education.
3. Adapting to Regulatory Changes
The Trump administration has announced potential significant reforms in areas such as foreign trade, labor regulations, and environmental policies. Mexican companies must prepare for these changes by forming multidisciplinary teams where each department head, based on their area of responsibility, monitors regulatory changes that may affect the organization as a whole (a synergistic and cross-functional compliance approach).
These multidisciplinary teams should consider implementing agile adaptation and compliance protocols and strategies.
Responding promptly to regulatory changes not only helps companies avoid legal issues but also allows them to capitalize on new business opportunities.
4. Collaboration and Strategic Alliances
In uncertain environments, collaboration between companies becomes a key factor. Strategic and commercial alliances—whether with industry chambers or companies in the same sector—enable the sharing of knowledge, experiences, resources, and best practices to strengthen regulatory compliance.
These collaborations must always adhere to competition laws and aim to establish common standards of conduct to address shared challenges.
5. Constant and Effective Communication
Communication is a fundamental pillar for the success of any company or organization. Therefore, programs or communication channels within companies should:
- Be reviewed and updated regularly to ensure effectiveness.
- Inform and train stakeholders, including employees, about the codes, policies, and processes that are part of the compliance management system.
Conclusion
Implementing compliance management systems, fostering a culture of integrity, adapting to change, collaborating strategically, and maintaining effective communication channels are essential measures for companies to face the challenges arising from the new U.S. administration. These actions not only mitigate legal risks but also enable companies to respond promptly and efficiently, safeguarding their best interests as they aim to grow and thrive in a constantly evolving commercial landscape.
The full article was made in collaboration with Lexlatin, and you can find the original article in Spanish here: https://lexlatin.com/opinion/relacion-comercial-mexico-estados-unidos-retos-empresas
All the information placed in this article and the rights of distribution belongs to @Lexlatin.
