As U.S. companies reassess the risks of relying on Chinese factories to make products, some are shifting operations to a country closer to home: Mexico.

The trend, known as nearshoring, has caught the attention of Arkansas-based global retail empire Walmart.

Early last year, Walmart needed to source $1m worth of corporate uniforms — more than 50,000 in a single order — but instead of buying from its usual suppliers in China, it chose Preslow, a Mexican family-owned clothing business. .

The entrance to the Tizayuca Industrial Park, which is located in Tizayuca, a small manufacturing city about an hour's drive northeast of Mexico City. Two businesses, Porton Loren and Proslo, are here. BRYAN DENTON FOR THE NEW YORK TIMES

It was February 2022, and it looked like the global trade landscape was about to change. The once-in-a-century epidemic has upended the shipping industry . Soaring costs for shipping products across the Pacific and clogged ports with moored ships are all clear examples of the risks that can come with relying on a single far-flung country to deliver vital shipments.

For multinationals, decades of faith in the economics of manufacturing in China has been sorely tested, especially as hostility between Washington and Beijing intensifies.

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Isaac Pressberg, Proslo's sales director, said in his Mexico City office that the Walmart order could be seen as a sign of Mexico's changing role in the economy, and of all nations on the Pacific side of the United States. opportunities brought about.

"Walmart has a big supply problem," Pressberg said. "They said, 'Okay, Mexico, help me.'"

There are fundamental geographic reasons for U.S. companies to move operations to Mexico. It typically takes a month to move a full container from China to the U.S. — a time that doubled or tripled during the worst of the disruption. But Mexican factories and U.S. retailers can trade within two weeks.

"All businesses sourcing from China understand that there's no way around the Pacific -- there's no technology to do that," said Ryan Mahdi, founder of Zipfox, a San Diego-based company that introduces factories in Mexico to those looking to Asia. Alternative American businesses. "Customers are always urging: 'Can you send the goods over soon?'"

According to U.S. statistics , in the first 10 months of last year, Mexico exported goods worth $382 billion to the United States, an increase of more than 20% over the same period in 2021. Since 2019, U.S. imports of goods from Mexico have increased by more than 25%.

In 2021, U.S. investors will spend more in Mexico — buying companies and financing projects — than in China, according to an analysis by the McKinsey Global Institute.

China will almost certainly remain at the heart of manufacturing for years to come, trade experts say. But the shift to Mexico represents a marginal redistribution of global manufacturing capacity amid the perception of destabilizing risks such as geopolitical adjustments and heightened climate change challenges.

Last month Raza Uniforms commercial director Ramon Becerra (left) hosted Veronica and José Justignano as they toured Raza Uniforms' Guadalajara facility Production. BRYAN DENTON FOR THE NEW YORK TIMES

As U.S. companies reassess the risks of relying on Chinese factories, some are shifting orders to factories in Mexico, part of a growing trend known as "nearshoring," or moving production closer to home . BRYAN DENTON FOR THE NEW YORK TIMES

According to U.S. statistics, in the first 10 months of last year, Mexico exported goods worth $382 billion to the United States, an increase of more than 20% over the same period in 2021. BRYAN DENTON FOR THE NEW YORK TIMES

“It’s not deglobalization,” said Michael Burns, managing partner at Murray Hill Group, an investment firm that focuses on supply chains. "This is the next phase of globalization centered on regional networks."

Mexico is presented as a potential means of shielding Americans from the pitfalls of globalization, a change fraught with historical irony.

Thirty years ago, business tycoon Ross Perot, who was running for president, painted Mexico as a threat to take American jobs, warning that "there's a huge sucking sound coming from the South".

“The reality is that Mexico can solve some of the challenges we face,” said Shannon K. O’Neill, a Latin America expert at the Council on Foreign Relations in New York. "Trade that is closer to Canada or Mexico is more likely to create and protect American jobs."

Given that the U.S., Mexico and Canada all operate in the same expansive trade area, their supply chains are often intertwined. All three countries provide components and raw materials for each other's finished products. Cars assembled in Mexico, for example, use a lot of parts from U.S. factories.

About 40 percent of the total value of Mexican exports to the U.S. consist of parts and accessories made in U.S. factories, according to a groundbreaking research paper. Only 4% of products imported from China are made in the United States.

Early last year, Wal-Mart opted for Mexican family-owned apparel business Proslo instead of sourcing $1 million worth of corporate uniforms from its regular supplier in China. TRENT BOZEMAN FOR THE NEW YORK TIMES

A Walmart spokesman said the company's interest in Mexico was part of a broader effort to make its supply chain less vulnerable to problems in any one region.

Currently, Mexico does not have the ability to replace China as a major supplier of various commodities.

On a recent morning, at the Pusilo factory, about 80 kilometers north of Mexico City, 200 seamstresses hunched over clattering sewing machines, sewing to the rhythm of Mexican folk music. Local designers sit in front of computer screens, brainstorming new ideas.

Yet the piles of synthetic fabrics on warehouse shelves are almost all made in China.

"All the basic materials still have to be imported from China because there are no suppliers here," Pressberg said. "I use fabrics that are simply not available in Mexico."

The Justignanos used to source from a business that imported Asian uniforms. However, as the epidemic intensified in 2020, the delivery time of orders that could be delivered in a few days in the past has become months. BRYAN DENTON FOR THE NEW YORK TIMES

The Justignanos rushed to find another supplier, also eager to find suppliers for their small business in the Western Hemisphere. BRYAN DENTON FOR THE NEW YORK TIMES

"The only way out is Mexico," Justignano said. BRYAN DENTON FOR THE NEW YORK TIMES

closer to home

On the other side of the Mexican border, in their dormitory community north of Dallas, Jose and Veronica Justignano also depend on important commodities from Asia, and they're also eager to find suppliers in the Western Hemisphere.

The couple runs a small business called Veronica's Embroidery from their home. They provide employee uniforms to restaurants, construction companies, and home services companies.

Born and raised in El Salvador, they fled a horrific civil war to live comfortably in America.

Justiniano, 50, came to Los Angeles first as a guard at the Beverly Hills Jail and later as a billboard installer. After moving to Dallas, he got an entry-level job at an auto parts factory and eventually rose to supervisor, gaining expertise in mechanics. Mrs. Justigniano, 54, is a domestic assistant to an elderly couple.

In 2018, the couple bought their first embroidery machine, which they keep in an upstairs bedroom. The following year, they landed their most important client, Gloria's Latin Cuisine, a chain of 22 fine dining restaurants in Dallas, Houston, San Antonio and Austin.

The Justignanos purchased the uniforms from a company that imports uniforms from Asia. Then use their machine to embroider the logo.

The Justignanos' collaboration with Razza Uniforms started small, with orders for just a few dozen chef's uniforms. Before long, they were sourcing 1,000 linen shirts in a single order. BRYAN DENTON FOR THE NEW YORK TIMES

The production of Raza uniforms in Guadalajara is spread out across quiet residential areas. BRYAN DENTON FOR THE NEW YORK TIMES

The Justignanos eventually entrusted a large portion of the business to Raza Uniforms. BRYAN DENTON FOR THE NEW YORK TIMES

Their distributors keep a large inventory in their Texas warehouse and usually deliver within one day. But as the pandemic intensified in 2020, lead times of days turned into months. The Justignanos were also late on deliveries, which was a serious threat to their business.

Justignano scrambled to find other suppliers.

"The only way out is Mexico," he said.

They eventually entrusted much of their business to Laza Uniforms, a family-owned business in Guadalajara, a thriving city about 560 kilometers northwest of the Mexican capital. Ramon Becerra, 39, Raza's commercial director, desperately wants to tap into the huge market in the north.

"We know America is our future," Becerra said.

The U.S. distributor of the Justignanos is a wholesaler who only sells items in stock and does not provide custom services. Laza is a design shop and a garment factory in one.

Becerra's team discussed the details the Justignanos wanted: a breathable, lightweight fabric to ease the heat of the kitchen. The two companies communicate easily by phone and video, regardless of the time difference.

They start with small orders of just a few dozen chef uniforms. By September 2021, "Veronica Embroidery" is already sourcing 1,000 linen shirts for an order at a price close to what its former distributor imported from Asia.

On a recent morning, Becerra hosted Justignano at his factory in Guadalajara. The two discussed a potential new partnership in which Razza would build a warehouse in Texas and Justignano would handle U.S. distribution.

"It's been a wake-up call for America," Justigniano said. "We have to rethink where our products are made."

Clothing business Proslo, which has been in business for four generations, has been increasingly selling jackets to Walmart as the global retail giant seeks to reduce its presence in China. BRYAN DENTON FOR THE NEW YORK TIMES

There are fundamental geographic reasons for moving operations to Mexico. It typically takes a month to move a full container from China to the U.S. — a time that doubled or tripled during the worst of the disruption. BRYAN DENTON FOR THE NEW YORK TIMES

Mexican factories and U.S. retailers can do business within two weeks. BRYAN DENTON FOR THE NEW YORK TIMES

troublesome legacy

Perhaps the biggest obstacle to Mexico realizing its potential as an alternative to China is Mexico itself.

Its president, Andres Manuel López Obrador, has neglected the country's infrastructure, including ports.

Even Pressberg, an ardent promoter of Mexico's industrial ethos, concedes that Mexico will struggle to amass China's manufacturing capacity.

He recalled his first trip to China to find fabrics more than ten years ago. There is a huge spinning mill, equipped with a professional dyeing business, and the scale of production surprised him.

“The scale of the factories there is unbelievable,” he said. "I don't think it's likely to go back. It's not going to be easy."

At his factory, he showed off a popular product, a black bomber jacket embellished with colorful patterns. The zipper is made in Mexico, as is the skull charm on the zipper. But the rest of the components—fabrics, yarns, linings—come from across the Pacific.

Still, the shift is palpable.

Near Puslow's factory, there is a huge factory that produces as many as six million buttons a day and employs about 1,500 people. Sales at the company, Roland Buttons, have risen by nearly two-thirds over the past year. The company's chief executive, Sonny Charuya, said its customers -- international brands such as Armani and Men's Wearhouse -- were shifting orders out of China.

"They think the U.S. will continue to confront China," he said. "They don't want to be dependent on China."

Near Puslow's factory, there is a huge factory that produces as many as six million buttons a day and employs about 1,500 people. Sales at the company, Roland Buttons, have risen by nearly two-thirds over the past year. BRYAN DENTON FOR THE NEW YORK TIMES

Roland Buttons CEO Sonny Charuya said its customers -- international brands such as Armani and Men's Wearhouse -- were shifting orders out of China. BRYAN DENTON FOR THE NEW YORK TIMES

Mexican companies are relying on the ongoing dispute between the United States and China. BRYAN DENTON FOR THE NEW YORK TIMES

geopolitical reorientation

Some in the apparel industry expect Mexico's appeal to wane as global supply chains return to normal.

Shipping prices have dropped dramatically over the past year. China has begun to ease restrictions on the new crown . Bernardo Samper, a longtime New York-based sourcing agent, said Chinese apparel makers are aggressively courting business by offering deep discounts.

"At the end of the day, everything is driven by pricing," he said.

In Mexico, however, businesses are relying on the ongoing dispute between the United States and China.

The Trump administration has imposed steep tariffs on hundreds of billions of dollars in Chinese imports. President Biden has continued that policy while adding measures to try to block China's access to technology.

Washington has accused the Chinese government of genocide over the Chinese government's brutal repression of the Uighur minority group in the western Xinjiang region , a major cotton producer. Any company that buys Chinese-made clothing faces accusations of exploiting Uyghurs in forced labor .

Russia's invasion of Ukraine and deepening ties with China have heightened the sense that the world is splitting into camps of friend and foe.

Companies need reliable supply chains.

Lectra, a French company that makes machines for cutting fabric for the apparel industry, has seen sales in Mexico and Central America rise by nearly a third over the past year.

“This nearshoring trend is basically driven by what’s happening in the U.S. and China,” said Carlos Sarmiento, the firm’s commercial director for the region.

"It's not that China will disappear from the U.S. market," he added. "People are now more willing to think about Mexico and Central America as an alternative, rather than relying entirely on China."