Nearshoring, Friend-shoring and the New Map

When the Census Bureau published the full-year trade figures for 2023, they confirmed something that had not been true for two decades: Mexico, not China, was the largest source of goods imported into the United States (Congressional Research Service). It stayed first in 2024, with about 15.5% of US goods imports, and again in 2025, when imports from Mexico were put at about $522 billion (CRS; aggregator figure, reported). China's share had peaked at about 21.6% in 2017; it was about 13–14% in 2023 and reported at about 9.4% in the first seven months of 2025 and about 6.6% in January–February 2026, on bases that differ by source. The headline had been building since the first Section 301 tariffs on Chinese goods in July 2018, and the pandemic, the 2021 freight spike and the tariffs of 2025 accelerated it.

The headline is true and important, and it is easy to over-read. A laptop or an appliance "from Mexico" can contain mostly Chinese, Taiwanese and Korean components; gross trade data credit the country of last substantial transformation, not the countries that made the parts. Imports surged before tariff dates in early 2025 and fell after them, so quarterly shares swung. And the value of artificial-intelligence servers assembled in Mexico and Taiwan for American data centres, many of them by Foxconn, Quanta and Wistron, moved bilateral totals in 2024–26 in ways that said little about where consumer goods were made. Mexico overtaking China is evidence that American supply chains moved. It is not evidence that they left China.

The map that emerged in 2023–26 had three new features. The first was China+1: companies kept Chinese suppliers and added others, in Vietnam, India, Mexico and Southeast Asia, for some volume or some customers. The second was nearshoring, production moved closer to the market it serves, which for the United States meant Mexico and for Europe meant Turkey, Morocco and central Europe. The third was friend-shoring, a term popularised by Treasury Secretary Janet Yellen in April 2022 (reported): sourcing from politically aligned countries, often with government support, especially for chips, batteries and critical minerals. This chapter explains what each actually buys, why moving a factory is a bet on all four factors of the flow equation at once, and why rules of origin, not freight rates, often decide whether a move pays.