What Trump’s Tariffs Wrought

In Mexico, Chinese exporters have found a side door into the world’s biggest market

When César Santos was growing up in the 1960s, he spent his weekends surrounded by horses and cattle on his father’s ranch outside Monterrey, Mexico. Today, a red monolith emblazoned with the words “Hofusan Industrial Park” announces that the patch of dusty wasteland has a new purpose.

Located in a prime spot between Mexico’s industrial capital and the US border, Hofusan has become a haven for Chinese companies looking to sidestep US tariffs and shorten supply chains that have been strained to a breaking point during the pandemic. The 11 plants and warehouses on the 850-hectare (2,100-acre) estate are part of the latest chapter in Chinese capitalism: The country dubbed the world’s factory now also exports white-collar managers to set up and run operations in places such as Thailand, Vietnam, and Mexico.

Three years ago there was just one building on the site. Today, 10 Chinese companies have plants there and three more are being built, say the park’s officials, who expect to have 35 businesses within two years. They predict there will eventually be 15,000 people working at Hofusan—about 10% of whom would be Chinese managers—and plan to build restaurants to cater to them as well as homes to house them. There’s already “more than $1 billion in investments here,” says Santos, sheltering in a glass office from the blazing heat and din of construction.

Among the park’s tenants are electronics company Hisense, furniture businesses Kuka Home and Sunon Furniture, auto-parts maker Hangzhou XZB, and garden equipment manufacturer Skyish. “If you want to do good business with America, you must have something close to the market,” says Simon Huang, country manager for Kuka Home.