Report: Industrial Demand Rises Along Canadian and Mexican Borders

Despite policy uncertainty, data points to industrial demand rising with commercial truck traffic at record levels and companies like LEGO and Tokai Kogyo ramping up operations in Mexico, Marcus & Millichap says in a new report on cross-border trade. U.S. exporters are leaning heavily on the United States-Mexico-Canada Agreement (USMCA) to sidestep proposed tariffs, helping sustain trade flows with Canada and Mexico.

“Specifically, nearly half of all Canadian and Mexican exports — a combined $180 billion — that entered the U.S. through May of this year did so under USMCA,” the report states. “Moving forward, a more intensive use of USMCA by exporters is expected as companies attempt to sidestep potentially new tariffs.

“This dynamic should prevent significant shifts in U.S. trade with Mexico and Canada from occurring, which has positive implications for industrial demand in border towns and larger metros further along the supply chain.” For example, Laredo, TX, which saw three million cross-border truck crossings in 2024, currently has 12 million square feet of industrial space under construction, or about 25% of the metro area’s current inventory levels.