Issue link: https://iconnect007.uberflip.com/i/1545206
JUNE 2026 I SMT007 MAGAZINE 43 increase, raising Mexico's share of U.S. electronics imports to 22%. Roughly 67% of U.S. electronics imports from Mexico and 48% of U.S. electronics exports to Mexico are intra-firm, meaning the same multinational companies are moving components and subassemblies across the border within their own production networks. More than half of U.S. electronics imports from Canada are intermedi- ate goods feeding U.S. production. Foreign direct investment into Mexico hit $34.3 billion in just the first half of 2025. The friend-shoring story is also better than the headlines suggest. Between 2017 and 2024, China's share of Mexico's electronics imports fell from 40.6% to 33.6%, as Korea, Vietnam, Taiwan, and Thailand grew their shares. Mexico is genuine- ly diversifying away from China, even as the U.S. negotiates harder on the "side door" question. Why This Matters Now The single most important issue for electronics manufacturers in this review is the rules of origin, because that is the direction where the U.S. nego- tiating push is most likely to head. For a sector built on cross-border, intra-firm production, even modest changes to the rules can reshape sourcing decisions and capital plans. In the next installment, I'll dig deeper into the USMCA rules of origin for key electronics product lines, including Article 2.10.1 and General Note 11(p), a long-standing provision that recognizes the deeply integrated nature of the IT industry by treating a defined list of computer and IT goods as originating when shipped to the U.S. from Mexico or Canada. That provision, more than any other, embodies what is at stake in the 2026 review for the electronics industry. James Kim is an international trade lawyer at ArentFox Schiff LLP. This series explores how trade policy, tariffs, and customs devel- opments impact the elec- tronics manufacturing industry.