Supply Chain Research

Mexico and Brazil have launched a free-trade area for cars and light trucks, allowing duty free trade subject to a 40% local content requirement. Bilateral trade in completed vehicles between the two countries reached $5.35 billion in 2018. That was only equivalent to 7.4% of Mexico’s trade in vehicles, reflecting the importance of the U.S. ​​​​​​​The deal may help automakers in Mexico diversify away from the U.S. ahead of the implementation of the U.S.-Mexico-Canada Agreement (USMCA). The most exposed automakers to the U.S. in terms of Mexico exports in 2018 were Ford – with 91.0% of ex...