Nothing like being prepared if you've got billions on the line, right?

That's pretty much how the global supply chain feels at the moment.

They've already had a rough year between Houthi shooties, Ukraine continuing, and droughts. Now they're looking at Joe Biden;'s reelection chances like one might watch a crippled wildebeest trying to take a shot at the Masai Mara crossing...woof. That ghastly, horrible feeling when you know the crocodiles are gonna win, but you just can't turn away is embuing every moment of this presidential race.

Right now, for all of his myriad troubles, Trump is looking like an 18 footer just floating in the muddy water.

Those in international businesses who ship products around the world are already in motion strapping on the best bite-proof armor they can cobble together.

 Global logistics companies tell CNBC they have started the planning for a potential Trump win in November and the strategies that will be needed to mitigate any additional tariffs, with Mexico a key import gateway for any escalation in the trade war against China begun under Trump and continued during the Biden presidency.

The planning started after the former president said in February he was considering a plan to impose tariffs of 60% or higher on Chinese goods as well as a blanket 10% tariff on all U.S. imports in his potential second term.

There's already a move afoot to diversify - decouple - even more from China. For all the talk of Trump being a Chinese asset during his presidency, you'd never know it the way these firms are anticipating he smacks the Chinese hard if he gets elected. Which, of course, smacks their bottom lines if they are still heavily tied in with the Chinese.

...“I think it will accelerate the current movement of de-risking and diversifying away from China into other countries,” Frank said. “A 60% tariff will make it more attractive to move to other places,” he added. The Trump administration tariffs kickstarted a shift in supply chain strategy which, according to Frank, became more well-developed by customers during Covid, when they contemplated moving factories and production out of China.

Interestingly enough, the biggest beneficiary of all this port of entry shifting hubbub has been Mexico. The Chinese have been using Mexico as a way to circumvent Trump tariffs that had been left in place by Biden (how he missed lifting those, I have no idea)...

China is shipping more goods to the US via Mexico, circumventing steep tariffs imposed by the Trump administration and retained by Joe Biden’s White House, according to a Financial Times analysis of trade data.

Figures from Container Trades Statistics, analysed by Xeneta, show the number of 20ft containers shipped from China to Mexico hit 881,000 in the first three quarters of 2023, the most recent period for which data is available, up from 689,000 in the same period of 2022. 

The rise came as Mexico overtook China as the biggest exporter of goods to the US last year, and as truck shipments across the border into the US have continued to increase quickly.

...many Chinese firms have switched to doing business in other countries as a way to disguise the country of origin of the goods, and China itself has been doing some significant palm-greasing in the country. So far, it's working for them.

In 2023, Mexico became the United States’ top trading partner, surpassing China. Just as the Mexican and American economies integrate, though, so have the Mexican and Chinese economies, with China now the former’s fastest-growing foreign investor.

...Put simply, while some view Mexico-U.S. integration as reflecting a success in decoupling from China, others believe that the Asian giant is trying to better its relationship with the U.S.’ neighbor in order to dodge sanctions and tariffs.

There are good reasons to believe this. After all, following the COVID-19 pandemic and President Donald Trump’s trade war with China, Chinese foreign direct investment in Mexico grew by three times between 2019 and 2021. In Nuevo León, the Mexican state with the highest total gross production, Chinese corporations were responsible for 30 percent of foreign investment in 2021.

Whatever Americans may think about the investments, Mexicans had more than enough reasons to celebrate: billions of dollars poured in from Beijing, thousands of jobs were created, and their country’s geopolitical relevance increased. From the government palace in Monterrey, the governor of Nuevo León, Samuel García, cheered: “Nuevo León is having a geopolitical planetary alignment. We’re receiving lots of Asians who want to come to the U.S. market.”

With these developments, it made sense for Mexico to further enhance its trade relationship with China, becoming a middle man of sorts between the world’s two largest economies. As U.S. imports from China fell by 25 percent during the first six months of 2023, Beijing decided to fixate on Mexico.

Mexico has thrown the Chinese a bit of a curve by imposing its own trade tariffs, which torqued the Chinese off. There are two main reasons for these: U.S. pressure and Mexican state revenues. And while feelings were hurt in Beijing, it hasn't really slowed anything down.

...Beyond diplomatic statements expressing frustration, neither Chinese businesses nor the Chinese government have shown any signs of slowing or stopping investment and trade with Mexico. The cost of leaving is probably much higher than those imposed by the new tariffs, thus not generating a sufficient incentive for Chinese companies to pack up shop. Regardless, China was most likely warned before the tariffs were put in place, allowing it to make the adjustments necessary to reduce any losses. As a result, these tariffs will allow Mexico to generate additional revenues with little blowback, calming its northern neighbor in the process.

There's also the advantage of Mexico being so much closer than the Orient. Freight companies like the railways are happy as clams with everyone diverting into our southern neighbor.

...“The potential for us is significant,” said Beth Whited, Union Pacific president, in a recent interview about its Mexico business with CNBC on the sidelines of the TPM conference. ”As you see people really rethinking their supply chain and saying, they’d rather have some of these things a little closer to home and investing in Mexico for growth. We are very well-positioned to do that. Mexico is a big part of our business, and we are thrilled at the opportunity to take advantage of nearshoring as the investment in Mexico continues.”

...“There are some really good ongoing discussions with some very forward-thinking clients of ours that are using the ocean to bypass the Trump tariffs so I think the future is going to be exporting from East and West into Mexico,” said Brashier in an interview at TPM. “If you’re looking, at a Trump presidency, you can’t have both China and Mexico be your enemy. So I’ll be interested to see what side folks land on in that in that administration. I feel like Mexico is going to be the future. I just think that the relationship between the US and China is something that is going to be difficult to repair.”

Trump has also said he's specifically going after the Chinese auto industry. Mexico sends a lot of vehicles to the US, and Chinese automakers are eyeing ramping up their manufacturing in the country as well. 

The vice president of the National Retail Federation said it's been preaching to members to diversify their sources for quite a while in order to be nimble in the event a trade war erupts. COVID brought that hard lesson home.

...Jon Gold, vice president, supply chain & customs policy at the National Retail Federation, told CNBC Mexico has long been a factor in strategies among it members to diversify their supply chains that predates the trade war. “Tariffs sped that decision up a little bit and Covid sped it up even further,” said Gold.

The head of a packaging company also learned not to have all those eggs in one basket if tariffs came into play.

...“I don’t want to say we were solely sourcing from China but it escalated us to build a supply chain out into other markets like Europe so if it’s 60% tariffs that do come into play have options and it’s not just China, We can flex into Thailand, and Europe,” Taylor said.

For all the bluster and sweat about Trump returning and reinstituting tariffs complete with warnings of "economic disaster," CNBC was honest enough to admit that they didn't destroy the world on the last go 'round.

Contrary to predictions, the Trump years were mostly pretty sweet for all concerned economically.

...Critics also warn of inflationary effects to be borne by consumers, however, during the Trump presidency and implementation of tariffs, inflation did not spike above the historical average.

Yeah. How 'bout that Trump inflation?

I'll take some of that right about now, please.

Should Trump grab the brass ring a second time, it will be hugely interesting to see what he does about the Chinese circumvention of tariffs through the Mexican middleman. I'm sure he could use that as leverage with whatever Mexican government is in power for any number of things, including the border.

Probably someone's planning for that, too.