MCALLEN, RGV – U.S. import tariffs on certain Chinese products along with the new USMCA free trade agreement are making the U.S.-Mexico border region attractive for Chinese manufacturing companies.
That was the message given by McAllen Economic Development Corporation (MEDC) and INDEX Reynosa leaders at a recent MEDC board meeting.
“We are seeing an uptick in enquiries from Asian and European companies, particularly from China,” Jamie Sepulveda told the board of directors. “We think this has a lot to do with the 301 tariffs on China and the new USMCA agreement.”
Sepulveda is executive vice president of MEDC. She gave the President’s Report in the absence of MEDC President & CEO Keith Patridge who was away.
Ralph Garcia, MEDC’s vice president of international business recruitment, elaborated on Sepulveda’s remarks.
“We are seeing Chinese activity. Today we are hosting a Chinese company that is a supplier to Black & Decker. This is very good for us because as companies are challenged with 301 duties and tariffs on products from China we will start to see opportunities in that expanded region,” Garcia said.
“They are looking at Mexico but they are also looking at the U.S. It is a great opportunity for us. Unfortunately, it does require us to be traveling quite a bit.”
Enrique Castro is president of INDEX Reynosa, the maquila trade association.
“Yes, the Chinese are coming,” said Castro, at the MEDC board meeting. “We have to analyze that because they are hard to work with, to deal with, but it is a pretty good opportunity. I was with them about a month ago and they bought 1,600 acres for a small (industrial) park in Apodaca. It is a great opportunity for the McAllen area.”
Apodaca, on the outskirts of Monterrey, is one of the fastest-growing cities in Nuevo León and an important industrial center.
Editor’s Note: Click here to read the U.S. Trade Representative’s news release about the Section 301 tariffs imposed on China.
In his report to the MEDC board, Garcia said he had one prospect visit during the last month. Garcia initially met company representatives while on a trade visit to Germany. The company, which produces metal rolls and sheets, is evaluating multiple sites in the United States. The company has automotive clients in the McAllen Metropolitan Statistical Area, as well as Reynosa and Matamoros. “They are looking to acquire 140,000 square feet and create 200 jobs,” Garcia said.
On the business retention and expansion front, there was activity from four companies, Garcia reported.
Garcia also reported on a recent trip to Germany for a trade show put on by the European American Investment Council (EAIC).
“We are learning about the European business culture, understanding what these companies are looking for. They are very different from Asian companies. We are learning and adapting to what their needs are and what is important to them so we can help them when they look at this region,” Garcia said.
“We are seeing some good activity through our partnership with EAIC. We are seeing companies actually come in (and visit). We have had proposals for projects they are putting together which is really nice, very detailed. It is a little different to what we traditionally do but it is information they need as they make an assessment of our region.”
Garcia said economic development leaders in other parts of the United States are envious of the unique selling point MEDC can offer.
“They are envious of what we are doing. When we attend these trade shows, one of the unique advantages we have is, we can offer something they can’t – Mexico. All the other participants are looking at you and they know you have that up your sleeve, especially those that say they have customers in Mexico. They look at me and it is almost like, this guy is going to talk again. It is an opportunity for us.”
Janie Cavasos is vice president of U.S. business recruitment for MEDC. In her report, Cavazos said she had four prospect visits over the past month.
“Three of the four have already signed their letter of intent to move forward with the projects,” Cavazos said. “We are waiting for two companies to receive their contracts with the city to make the final step to signing the 380 agreement and purchase the property so they can get started on the construction of the facilities.”
“We are looking at a total of 731,280 square feet and 320 jobs. Keep in mind these jobs are paying at least $15 an hour and upwards to start with. We are hoping to finalize these by the end of the year.”
On the business retention and expansion (BRE) front, Cavazos spoke about Rio Grande Pak Foods, which does custom chicken deboning processing and has about 150 employees. The company has added ten employees. “The company is doing extremely well. They are looking to add 20,000 square feet and 40 new jobs for the night shift. They are growing,” Cavazos said.
Cavazos also reported on Worldwise Incorporated, which makes beds for pets. The company’s products are sold in 40,000 stores worldwide. Worldwise has leased a 16,000 square-foot building in McAllen to use as a liquidation outlet for goods that do not move fast enough.
Of five BRE visits, Cavazos said there will be an expansion of 149,500 square feet with 95 new jobs added.
In her Committed Prospect report, Cavazos said United Parcel Services has chosen to move to McAllen. The company will construct a 72,000 square-foot facility and hire 17 employees. “We were competing with Dallas and we won. It is a $28 million investment in McAllen,” Cavazos reported. “We have finalized the 380 Agreement and the company is ready to start construction.
In his monthly marketing report, Brandon Garcia said the Made In McAllen campaign was going well.