If you have visited a business school or an MBA, you should remember Pankaj Ghemawat’s globalization theories (yes… the three A’s) that justify Arbitrage -production based on economies of scale- as the main ‘trigger’ of current trade and turned China into the world ‘manufacture’ country.

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Another broken paradigm of this decade. This time from China’s ‘Zero Covid’ policy closing ports and factories, ships docking delaying commercial seasons, hyperinflation, a strong dollar, the Ukrainian invasion… it’s better to stop this list.

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The global trade system is strong on paper but weak in practice; look at the waiting lists to buy cars, cell phones, handbags, or avocados. After searching on six Rolex stores in Switzerland, the pinnacle of watchmaking, the gossip is true: today’s industry’s flagship brand has 0% availability (not a typo).

A moment where businesses (regardless size) are taking financial stretching to a new level, preparing globally for an unprecedented adaptation of wages, raw materials, and logistics tariffs that will imply higher prices for consumers next year.

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However, these stretches will end up, and it will be necessary to make more significant changes to evolve their businesses. AI, sustainability, DTC… anything that reduces costs and substantial efficiencies.

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Changing one of the game’s main rules from ‘Think Global - Act Local’ to ‘Think Local - Act Global’ or Nearshoring.

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According to Deloitte and ABB, seven out of 10 US / Eu companies are planning to invest in facilities closer to their countries of origin due to recent years’ changes. A trend that may end up changing multinational trade for good.

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Of course, the eyes are on large markets’ closed neighbors. “China’s loss is Mexico’s gain,” said Brian Moynihan (CEO of Bank of America) last week.

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Jumping the Atlantic, denomination of origin, and local manufacturing are protected by governments and preferred by consumers. According to Kantar, 74% of Europeans prefer to buy something from the community of countries.

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Let’s face it: European quality is hard to beat.

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It’s inspiring to arrive at the Fendi workshops in Milano and see octogenarian artisans teaching newcomers from Central Saint Martins how to put together a Peekaboo bag. A repeated scene in almost all Premium and massive categories.

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Multinationals are taking advantage of this trend to develop a new generation of factories focused on sustainable products, like Ford in Germany and Spain, which aspire to sell 600,000 electric cars annually from 2026.

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It seems like the game’s new name is ‘achieve business as usual by replacing ships and planes that cross seas and oceans’. This may be singularly the ‘game-changer’ moment for Mexico to finally belong to the club of the ten largest economies in the world.

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Remember three years ago when the best business was to bring a container from China? What a changeful decade we are living in. Don’t you think?

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