Mexico’s President Claudia Sheinbaum announced a plan to reduce the country’s imports from China in a bid to support local industry and align herself with the US and Canada as a trade partners.
Reuters
Amid a shrinking share of North American exports to the world, Sheinbaum stated that Mexico would offer incentives for nearshoring, including tax deductions, and develop plans for individual sectors for how to increase the local content of goods made in Mexico.
The new decree on incentives for both Mexican and foreign firms will be published Jan. 17.
“What isn’t made here can be made here. The Plan Mexico was very clear,” Francisco Cervantes, president of the country’s business coordinating council CCE, said. “We have a trade agreement with the US and Canada that the president said is very important, so as long as we stick to the terms of the agreement, things will go well for us.”
North America’s share of global trade has declined, while China’s has increased, Finance Minister Rogelio Ramirez de la O said during the event, underscoring the importance for the region of replacing its imports from the Asian giant.
“If North America replaces 10% of the imports we are getting from China, and we make them in North America, Mexico’s GDP would grow 1.2% more than it normally does, the US 0.8% more and Canada 0.2% more,” Ramirez de la O said.
Sheinbaum said the US-Mexico-Canada trade agreement, known as USMCA, is the best way to compete commercially with China. She expressed confidence that the deal, which is scheduled to be reviewed in 2026, will continue despite the tariff threats by incoming US President Donald Trump.
Trump has pledged to impose tariffs of up to 25% on Mexico and Canada if those countries don’t help to reduce the crossing of undocumented migrants and curb drug trafficking into the US. The Republican has also expressed concern that China is using Mexico as a back door to send cheap goods into the US, affecting local producers.
Sheinbaum, who spoke with Trump about Mexico’s progress against migration and drug trafficking during a November phone call, since taking office has initiated a campaign to combat unfair trade from Asian countries, including China, with tariffs on products that affect the domestic textile industry and seizures at shopping malls selling cheap goods that the government says were illegally imported into Mexico.
As a way to promote nearshoring, as the boom of factories moving to Mexico to be closer to the US market is known, Sheinbaum’s government will announce tax deductions for local and foreign companies. These deductions, which will be higher for technology, research and development, will remain in place until October 2030.
Sheinbaum also announced she would seek to grow Mexico’s total energy generation capacity by about 16%, with a focus on increasing the share of renewable energy sources in Mexico’s power matrix. Additionally, she’ll focus on growing Mexico’s natural gas storage capacity, streamlining permits for independent power generators, and publish rules for how the private sector can partner with state energy companies on projects.
Among the “Plan Mexico” priorities are to speed up the permit process for exporting manufacturers that import materials duty-free and boost the purchase of locally made goods.
As part of that plan, Mexico wants to by 2030 increase the percentage of Mexico-made components in each vehicle to 15%.
Mexico also seeks to increase public and private investment in the country to more than 25% of gross domestic product, Sheinbaum said without specifying in which areas the government would seek to increase spending.
Reducing imports from China “is a challenge but it is feasible,” said Antonio Ruiz, of the Compliance & Government Liaison Office for Ciudad Juarez-based manufacturer TECMA. “We can manage it. Canada, the US and Mexico are each passing through political processes, and coming to terms with their differences, but together we can manage.”
German retail sales rose in 2024, but growth should be more modest this year due to the high level of uncertainty, according to retail association HDE.
Last year, retail sales rose 1.1% compared to the previous year in inflation-adjusted terms, official data showed on Friday. The HDE forecasts 0.5% growth in real terms this year.
“Consumption and the retail sector in Germany will not really gain momentum in 2025 either,” said HDE managing director Stefan Genth. “There is simply too much uncertainty,” he said. “Wars, high energy costs and overall economic stagnation are a toxic cocktail for consumption.”
In nominal terms, retail sales rose by 2.5% in 2024 and are expected to grow by 2.0% in 2025, according to HDE’s forecast.
The latest HDE survey with 700 retailers shows that 22% of respondents expect sales to increase this year, while almost half of them expect results to be below the previous year’s level.
In December, retail sales fell by 1.6% compared with the previous month, official data showed. Analysts had predicted a 0.2% increase.
Many big names in UK retail had a good Christmas season — despite the sector being generally sluggish — but it seems John Lewis Partnership (JLP) may not have been one of them.
The retailer — which operates its eponymous department stores and webstore, plus Waitrose supermarkets — has missed its profit target after a disappointing festive season.
It hasn’t shared any info officially but internal documents seen by The Telegraph suggest bad news to come when it does release its results.
Those internal documents have only been shared with staff so far with the company saying that sales have fallen short of expectations and it’s unlikely to achieve its hoped-for £131 million full-year profit.
The company is said to have blamed “lower consumer confidence and weaker than expected market confidence” for the sales miss in the month to 21 December, although also the fact that key trading days fell outside the period.
Sales targets were missed at both of the firm’s chains, although the newspaper said it still claimed it outperformed rivals and staff should be “proud of our performance”.
It will be interesting therefore to see exactly what its figures were as a number of rivals have actually reported a good Christmas. If its stores have beaten other supermarkets and chains like M&S, perhaps its targets were too ambitious in the first place.
We won’t know for a while, but we do know that with M&S resurgent, JLP’s supermarkets and department stores have lost some of their lustre as the destination of choice for Britain’s middle classes.
So what were the firm’s benchmarks? Back in September it had said it was seeing strong demand and expected a significant rise in profits for the year to January. The prior year’s pre-tax profit had been £56 million and the year before that it made a loss.
It had also talked about its turnaround efforts paying off and that it was seeing a “considerable improvement” in performance, with the John Lewis chain in particular expected to benefit from a buoyant second half.
It’s been rumoured for some time that he would exit the label but it’s not yet known what his next step will be.
Jones has been widely praised for his work at Dior with his latest men’s collection shown this month being hailed as a success.
He’s been a key creative at LVMH having also designed its Fendi women’s collections. And he helmed Louis Vuitton’s menswear before he joined Dior.
The company said it “wishes to express its deepest gratitude” to the designer “who has accelerated the development of Men’s collections internationally and has greatly contributed to the worldwide influence of the House by creating an inspiring wardrobe that is both classic and contemporary, and connected to some artists of our time”.
And Delphine Arnault, who’s chairman and CEO of Christian Dior Couture,added: “I am extremely grateful for the remarkable work done by Kim Jones, his studio, and the ateliers. With all his talent and creativity, he has constantly reinterpreted the House’s heritage with genuine freedom of tone and surprising, highly desirable artistic collaborations.”
Jones meanwhile called it a “true honour to have been able to create my collections within the House of Dior, a symbol of absolute excellence. I express my deep gratitude to my studio and the ateliers who have accompanied me on this wonderful journey. They have brought my creations to life. I would also like to take this opportunity to thank the artists and friends I have met through my collaborations. Lastly, I feel sincere gratitude towards Bernard and Delphine Arnault, who have given me their full support.”
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