The NEW EXPORT Model.
ROUTING THROUGH VIETNAM and MEXICO

The debate about deglobalisation has been conducted with less precision than the investment decision it informs requires. True deglobalisation would mean the absolute volume of cross-border trade declining, production relocating closer to consumption, and supply chains shortening in length and complexity. There is limited evidence for this.

What the data shows is trade rerouting: a geographic reshuffling of where goods are manufactured and from which country they are exported to the US, the EU and other major consumer markets. The ownership of production, the technology content of production and often the intermediate inputs continue to have deep Chinese involvement even when the final shipment originates from Vietnam, Mexico or Malaysia.

The investment implication of this distinction is significant. If the story is deglobalisation, the beneficiaries are domestic manufacturers in consumer markets and companies with short, local supply chains. If the story is trade rerouting, the beneficiaries are the routing nodes: Vietnam, Mexico, Malaysia, Morocco, and the logistics, trade finance and industrial property infrastructure that serves the rerouting hubs.

Vietnam's export boom since 2018 has been driven primarily by electronics, which grew from approximately 25 percent of Vietnamese exports in 2015 to over 35 percent by 2025. The headline story is China-plus-one: global electronics companies shifting assembly capacity out of China to avoid US tariffs.

The underlying reality is more complex. A significant portion of Vietnamese electronics exports still have high Chinese content: components, materials and intermediate inputs sourced from Chinese suppliers that are shipped to Vietnam for final assembly before export. Studies by the Asian Development Bank and the Peterson Institute have estimated that the value-added in Vietnam in some export product categories is as low as 15 to 25 percent of the total export value, with the remainder attributable to Chinese inputs and inputs from other countries.

The US Customs and Border Protection has been aware of this dynamic since the first tariff escalation in 2018. CBP enforcement actions against transshipment (goods routed through third countries to avoid tariffs without substantial transformation) have been increasing. The transshipment risk is real and is being priced into investment decisions by companies that have consulted trade counsel. The companies most at risk are those with shallow local value-added; the companies most resilient are those with genuine transformation of significant complexity in Vietnam.

Mexico's position as a US trade partner is structurally different from Vietnam's, for reasons the desk has detailed in the nearshoring analysis (LATAM 03-01). The critical distinctions for the routing versus deglobalisation debate: Mexico's geographic proximity makes logistics cost differentials self-reinforcing rather than policy-dependent; USMCA's rules of origin requirements create a genuine incentive for domestic value-added that is different from the looser origin regimes in Southeast Asia; and Mexico's existing manufacturing ecosystem, 30 years of maquiladora infrastructure, has a depth of component and material sourcing that Vietnam is still building.

The Chinese content question applies to Mexico too. Chinese components flow into Mexican assembly operations across automotive, electronics and consumer goods. But the USMCA regional value content requirements create legal and commercial pressure to increase North American content over time, creating a structural pull toward genuine supply chain domestication that operates differently from the softer incentives in other rerouting hubs.

The routing beneficiaries can be identified across several categories. Infrastructure and logistics operators serving the routing hubs are the cleanest exposure: industrial park developers in Vietnam's Binh Duong and Hanoi provinces, logistics operators in Mexico's industrial corridors, and port operators at gateway facilities that have seen volume surges from trade rerouting.

Manufacturers that have built genuine local value-added are the second category. Apple's supply chain in Vietnam is a legitimate rerouting success story: Foxconn, Luxshare and other assemblers have moved real production capacity, not just final assembly stations, and the local content story is credible to CBP scrutiny.

Companies at risk are those whose Vietnam or Mexico operations are predominantly final assembly with unchanged Chinese input streams. These face CBP enforcement risk, USMCA content audit risk and the medium-term threat of country-of-origin determination that would strip their tariff advantage.

The desk's preferred exposure is the infrastructure layer of the rerouting story rather than the manufacturing layer. Industrial REIT exposure in Mexico (Vesta, Fibra Monterrey) and logistics operators (DB Schenker's Mexican subsidiary, CEVA Logistics in Vietnam) provide access to the trade volume growth without taking on the CBP enforcement risk that individual manufacturers face.

For direct manufacturing equity: only companies with demonstrable and auditable local value-added above the USMCA regional value content thresholds or above 30 to 40 percent in Southeast Asian content rules. Companies relying on final assembly alone for their tariff advantage are a short, not a long.