Critical Concerns Around Cross-Border Trade Amid Tariff Changes

CHICAGO and MONTERREY, Mexico, Feb. 27, 2025 (GLOBE NEWSWIRE) — Redwood Logistics (Redwood), one of North America’s fastest-growing fourth party logistics (4PL) providers, has released its Q1 2025 Cross-Border Index, highlighting how companies are adapting to the imminent 25% tariffs on goods imported from Mexico to the United States. With businesses pulling forward shipments ahead of the March 1 deadline capacity is tightening and border congestion is soaring, leaving companies scrambling for solutions.

New tariffs have triggered geopolitical tensions, retaliatory measures, and rising costs for U.S. consumers. Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum have floated retaliatory tariffs or boycotts of U.S. goods, while financial markets showed volatility amid uncertainty. Though President Trump and President Sheinbaum reached a temporary agreement to delay tariff implementation by one month, projected long-term impacts continue to weigh heavily on cross-border trade.

“Many of our customers are already moving to mitigate potential risks. One customer is planning to relocate over 25% of its Mexican operations back to the U.S.,” said Jordan Dewart, President, Redwood Mexico. “However, in the short term, this shift is driving significant disruptions, with border wait times exceeding an hour at the World Trade Bridge and almost two hours at the Ysleta-Zaragoza Bridge. Add Mexico’s system maintenance and upcoming holidays, and you have the perfect storm of disruption.”

Emerging Trends and Immediate Challenges

• Proactive Shipment Strategies: Businesses are ramping up production and stockpiling goods ahead of the tariff deadlines, leading to chaos at major border crossings.
• Retaliatory Tariffs: Mexican and Canadian responses could severely impact the profitability of cross-border manufacturing.
• Operational Constraints: With existing contracts tying companies to Mexican-based operations and lacking U.S.-based alternatives, pivoting has become a logistical and financial maze.
• Visa and Carrier Uncertainty: Approximately 35% of cross-border truck carriers rely on B1 visas, creating further hesitancy given current U.S. immigration policies.

• Infrastructure Disruptions: Mexico’s recent system maintenance (Feb 8–15) and a surge in cargo theft during transit highlight the need for enhanced planning and security measures.

To overcome current challenges, many companies are leveraging foreign trade zones, which allow businesses to defer tariff payments; however, these zones are quickly reaching capacity. Another growing trend is shifting production to duty-free regions, which helps minimize exposure to retaliatory tariffs but requires significant adjustments to supply chain operations. Additionally, integrating technology has become essential, providing tools to track the impact of tariffs on total landed costs and offering businesses much-needed clarity in uncertain conditions.

“While the nearshoring trend faces challenges, Mexico remains a vital manufacturing hub,” added Dewart. “With the right 4PL partner, companies can balance the impacts of new tariffs and maintain shorter cash-to-cash cycles.”

Redwood’s experts—bolstered by a dedicated cross-border team at Redwood Mexico—work with businesses across the globe to implement strategies designed to endure and thrive during tariff uncertainty. Redwood provides tailored solutions, including identifying new suppliers, routes, and network models, to help shippers minimize financial losses.

“During the last tariff cycle, Redwood successfully supported businesses with well-executed contingency plans—and the company continues to bridge disruption with opportunity in 2025,” concluded Dewart.

For more information on how to best move loads across the US-Mexico border, please contact us here.

About Redwood

Redwood Logistics, a leading logistics platform company and modern 4PL headquartered in Chicago, has provided solutions for moving and managing freight for more than 21 years. The company’s diverse portfolio includes digital freight brokerage and flexible freight management all wrapped into a revolutionary logistics and technology delivery model—Logistics Platform as a Service (LPaaS). LPaaS utilizes an open platform for digital logistics that empowers shippers to seamlessly mix-and-match partners, technologies and solutions into their own unique digital supply chain fingerprint. Redwood connects a wide range of customers to the power of supply chain management, technology and the industry’s brightest minds. For more information, visit www.redwoodlogistics.com.

Media Contact
Tyler Thornton
LeadCoverage
tyler@leadcoverage.com