Trade in Transition: Growth, Resilience, and Complexity To Define North American Trade in 2025 and Beyond

In terms of North American trade, the stakes have never been higher, as the findings of DP World’s 2025 Trade in Transition report attest. The annual report, co-authored with Economist Impact, examines the headwinds of global trade in 2025 and their impact around the world. 

The regional North American report, “North America: Balancing Growth, Resilience and Compliance,” analyzes shifting trade dynamics. It finds 50% of North American executives rank geographical diversification as their top supply-chain strategy — higher than the global average of 46%. But in true North American fashion, this isn’t just about playing it safe. For many businesses, diversification isn’t just a safety net; it’s a growth engine.

In the wake of Donald Trump’s return to the White House, North American businesses face a volatile trade landscape. From renewed debates over the United States-Mexico-Canada Agreement (USMCA) to rising protectionism, companies must navigate a maze of policies, geopolitical tensions, and economic pressures. This year’s survey sheds light on these challenges.

Diversification: A Growth Strategy with a Side of Stress
Diversifying supply chains is a lifeline for North American companies bracing for tariffs or trade restrictions. Canadian and Mexican businesses reliant on the U.S. market see diversification as critical to survival. 

But let’s not sugarcoat it: diversification isn’t without hurdles. Expanding supplier relationships or relocating production can spike administrative costs and complicate logistics. Edward Brzytwa, vice president of trade at the Consumer Technology Association, notes, “Diversification efforts often raise administrative costs, but they also mitigate risks and create new growth opportunities.”

The numbers back him up. Nearly three-quarters of North American companies are expanding supplier relationships, opting for broader networks over the risk of putting all their eggs in one basket. And while this strategy might involve some headaches, it provides a crucial buffer against disruptions and uncertainties.

Nearshoring and Reshoring: Mexico’s Moment?
While diversification is the star of the show, nearshoring and reshoring are gaining traction, with 38% of U.S. businesses prioritizing these strategies. Mexico is emerging as a key player, with its skilled labor force and expanding infrastructure, reaping the benefits from the USMCA’s streamlined customs procedures and digital trade provisions. The Port of Manzanillo, for instance, is undergoing a $2.7 billion expansion to more than double its capacity, targeting a position among the world’s top 20 container ports. This expansion is part of the country’s broader push to attract manufacturing investment, particularly in industries like automotive and aerospace.

But let’s not get ahead of ourselves. Mexico faces challenges. Energy nationalization policies have deterred investors, and labor shortages remain a concern. As Leila Afas, director of global public policy at Toyota, bluntly puts it, “Mexico should have benefited far more from nearshoring trends, but its policies have held it back.”

The USMCA: A Love-Hate Relationship
The USMCA is the glue holding North American trade together — or at least trying to. Stricter rules of origin are encouraging companies to source materials from within the region, boosting intra-regional trade. Proposed tariffs on Mexican car imports, though, have created uncertainty, particularly in the automotive sector, pushing companies like John Deere to reconsider plans to move production south of the border. 

While Trump’s renewed focus on reshoring may win him points with American manufacturers, it’s creating headaches for Mexican factories reliant on the U.S. market. While some tweaks to the agreement are anticipated, for now at least it remains a cornerstone of regional trade integration.

Self-Sufficiency and Friendshoring
With rising geopolitical tensions, 27% of North American executives prioritize self-sufficiency, compared with a global average of 20%. As an alternative to slamming the door on international trade, businesses are exploring “friendshoring,” relocating supply chains to trusted allies like Mexico and Vietnam. Since 2018, China’s share of U.S.-manufactured imports has declined, with Mexico and the EU stepping in. Continued reliance on Chinese suppliers for critical components makes true diversification more of a long-term goal than an immediate solution.

Labor Shortages: The Ongoing Challenge
If there’s one issue keeping North American executives up at night, it’s labor shortages. The tight labor market, particularly in advanced manufacturing sectors, complicates supply-chain reconfiguration. Automation offers hope, with 51% of executives believing technology can offset shortages. Companies like Toyota are adopting “co-bot” systems where humans and robots collaborate to boost productivity. However, automation isn’t a silver bullet. Upskilling the workforce and addressing immigration restrictions remain critical to solving the labor crisis.

The Bottom Line
North American trade is at a crossroads. Diversification, nearshoring, and automation can provide pathways to growth and resilience, but they come with their own set of challenges. From Mexico’s manufacturing boom to the labor shortages plaguing the region, the trade landscape is as dynamic as ever.

For businesses navigating this new normal, the key is adaptability. By embracing diversification, investing in technology, and leveraging regional trade agreements like the USMCA, companies can turn challenges into opportunities.

Curious to learn more about the findings shaping North American trade? Click here to download a copy of the full report and discover how your business can thrive in this evolving landscape.