Mexico Has A Plan

The Supply Times Issue #71

Naseem Malik
January 30, 2025

Happy New Year, dear readers!

Within a matter of days, the Trump administration could hit Mexico and Canada with potentially crippling 25% tariffs. Or perhaps they won’t, and it’s merely a threat designed to pressure our neighbors into faster action on border security. In this edition, I’ve chosen to focus on Mexico’s (so far) level-headed response to this volatility and its plan for boosting manufacturing and trade in the next five years.

Also, the World Economic Forum has released its Future of Jobs Report. I couldn’t possibly summarize the whole thing (it’s massive), but I have zeroed in on my favorite topic: the anticipated impact of technology on jobs and skillsets between now and 2030. Will we see a net gain or net decline in jobs? Read on to find out.

This issue features the usual bunch of AI Insights and recommendations for the week's podcasts, books, shows, charts, and tweets, followed by a final chuckle.

Let’s get going.

Industry Highlights: US Threatens Mexico with 25% Tariffs

President Claudia Sheinbaum of Mexico seems to be keeping her cool about the looming 25% tariffs President Trump has threatened to impose. She’s not convinced they will actually happen, but just in case, she’s got a plan up her sleeve.

Reports suggest Mexico is ready to retaliate with tariffs ranging from 5% to 20% on U.S. products, with a strategic eye on avoiding the automotive sector, which is crucial for both economies. If push comes to shove, we might see tariffs on American staples like meat, cheese, apples, and even bourbon whiskey—products that could hit hard in regions that heavily supported Trump.

Partly in response to Trump’s (deliberate) uncertainty, Mexico is making a bold move with the launch of Plan México, a $1.4 billion initiative designed to boost regional trade integration and reduce reliance on Asian imports. The plan aims to attract foreign direct investment in key sectors like semiconductors, electric vehicles, and medical devices. As businesses are increasingly nearshoring, Plan México offers financial incentives to ramp up Mexico’s manufacturing capabilities and meet global demands.

Image: Slack

At the heart of Plan México are some enticing tax incentives. According to Supply Chain World, companies can take immediate tax deductions on investments in new fixed assets, such as advanced machinery and infrastructure upgrades. This means manufacturers can reduce their taxable income significantly in the same year they invest, easing their financial burden. For instance, firms in the automotive and semiconductor sectors can utilize these deductions to enhance their facilities and maintain competitiveness on the global stage.

The plan also includes additional deductions for workforce training costs, with about 1.5 billion pesos allocated for this purpose. Businesses investing in training programs can receive extra tax benefits, which are crucial for developing a skilled Mexican labor force ready to tackle advanced manufacturing demands in high-tech areas like robotics.

Plus, the initiative streamlines permit processes for exporters relying on duty-free materials, simplifying operations for businesses in Mexico. This combination of tax incentives and operational efficiencies positions the country as a hub for high-value manufacturing, helping to reduce logistical complexities and costs for North American companies.

Plan México strategically focuses on industries critical to North America's economic growth—think semiconductors, automotive manufacturing, medical devices, and agribusiness. The semiconductor sector is set to thrive, encouraging manufacturers to establish facilities closer to key markets, thus reducing dependency on Asian imports. Meanwhile, the automotive industry, particularly electric vehicle production, is also expected to flourish, with goals to boost domestic content in vehicles by 15% by 2030.

But let’s not forget the elephant in the room: the potential impact of Trump’s proposed 25% tariffs on Mexico and Canada. Exports to the U.S. account for 32% of Mexico's GDP and 21% of Canada’s, making it clear that the administration sees tariffs as a tool to push for action on essential issues like immigration, drug trafficking, and the trade deficit.

Immigration and border security are major concerns. The reinstatement of the Migrant Protection Protocols underscores the administration's determination to tackle these challenges by putting pressure on Mexico. There’s also the alarming rise in fentanyl-related deaths in the U.S., prompting calls for Mexico to step up its efforts against drug trafficking. Add ongoing trade disputes—especially around automotive production and agricultural imports, including GM corn and Canadian dairy—and you have a recipe for rising tensions.

The potential economic fallout from these tariffs could hit all three countries hard. With intertwined economies—especially in automotive and energy sectors—estimates suggest that Mexico's GDP could drop by 1.7% and Canada's by 1.2% if the tariffs are enacted. While the U.S. might not feel the pinch as severely, key industries would face rising costs. And let’s not forget that Mexico and Canada have hinted at retaliatory measures, which could lead to serious market volatility.

While President Sheinbaum might be optimistic about the fate of Trump’s tariffs, the situation remains delicate. With Mexico’s proactive Plan México and potential retaliatory measures on the table, it’s clear that both nations are gearing up for a possible trade showdown.

Saturday will reveal if it’s all just hot air. If history has taught us anything, it’s that there’s a world of difference between a spoken (or Tweeted) threat and a signed order.

The Future of Work: Which Jobs Will Be Displaced by 2030?

At 290 pages, there’s too much packed into the World Economic Forum’s Future of Jobs Report 2025 to summarise here, so let’s focus on what I believe matters most: the impact of technology on jobs.

First, let’s look at the total “churn” of jobs expected by WEF over the next five years. It’s important to understand that the dataset is global and that they ascribe the churn to over a dozen macro trends (not just due to AI and automation).

Here’s the headline: it’s net positive. WEF expects 170 million jobs to be created by 2030 and 92 million jobs to be displaced. This is a structural labor market churn of 22% or a net employment increase of 7%.

WEF measures the impact of macrotrends on job creation and decline. As you can see in the chart below, some factors have bigger impacts than others. For example, efforts to adapt to climate change could create 5.5 million jobs (seems high?). The discovery of new materials and composites will create almost 100K new jobs. Robots and AI will displace nearly 5 million jobs but create over 2 million.

But which jobs are growing, and which are declining? Predictably, the fastest-growing job roles are being driven by tech developments, advancements in AI and robotics, and (particularly across the developing world) broadening digital access. Expect accelerated growth in roles such as AI and ML Specialists, Software and Applications Devs, Big Data Specialists, and FinTech Engineers.

On the flipside, the fastest-declining jobs are likely to be clerical positions, including cashiers, ticket clerks, administrative assistants, executive secretaries, printing workers, and accountants and auditors. Key factors driving this decline include increased digital access (a double-edged sword), advancements in AI and information processing technologies, and using robots and autonomous systems. Additionally, an aging workforce and slower economic growth contribute to the reduced clerical roles.

This is where things get interesting. The authors expect a nearly 15 percentage point reduction in the proportion of total work delivered by humans by 2030 vs 2025. Human-machine collaboration is expected to grow by 3%, while work delivered with technology (machines and algorithms) will jump from 22% to 34%.

At the industry level, all sectors are expected to see a decline in the share of tasks carried out solely by humans by 2030. However, the reasons for this reduction—whether due to automation or human-machine collaboration—vary across different sectors. For instance, Insurance and Pensions Management and Telecommunications are leading the way in automation, with over 95% of the decrease in human-only tasks projected to come from advanced automation.

On the other hand, nearly half of the reduction in human-only tasks in the Medical and Healthcare Services and Government sectors is expected to be driven by increased collaboration with machines.

In four sectors—Oil and Gas, Chemicals and Advanced Materials, Financial Services and Capital Markets, and Electronics—automation is not only set to reduce the share of tasks typically done by humans alone but also those that involve collaboration with machines.

Finally, let’s check out the skills that are expected to grow in importance by 2030. The chart below makes it clear that technological skills are expected to gain importance faster than any other type. AI and big data are leading the pack, followed by networks, cybersecurity, and tech literacy.

Alongside these, creative thinking and socio-emotional skills like resilience, flexibility, curiosity, and lifelong learning are also rising. Other important skills include leadership, talent management, analytical thinking, and environmental stewardship.

Skills like sensory processing, reading, writing, and mathematics, along with dependability and attention to detail, are considered stable. However, reading, writing, and math are expected to decline slightly, and manual skills like dexterity and endurance are projected to drop significantly.

Another way of looking at it is to consider what will constitute “core skills” in 2030. As you’d expect, the magic quadrant (top right) has the usual suspects: AI, Big Data, and technological literacy. It’s interesting to note that systems thinking, creative thinking, and analytical thinking also make the cut. Beware of emphasizing “out of focus skills” (bottom left), many of which are already being automated: multi-lingualism, quality control, programming, and marketing/media.

The WEF’s Future of Jobs Report 2025 reveals an intriguing future for the global job market. In terms of skill sets, it's clear that honing technological know-how, along with creative and socio-emotional skills, will be vital for success. While technology is set to transform many roles, the overall outlook is positive, with millions of new jobs expected alongside those that will fade away. You might remember an edition of TST published last year titled “AI Jobpocalypse!” - hopefully, these fears will remain unfounded.

AI Insights

DeepSeek’s Learning Model Explained: Here’s the gist of it: Supervised Fine Tuning (SFT) is a key part of AI development where models get trained on carefully chosen datasets to help them learn step-by-step reasoning, often called chain-of-thought (CoT). It was seen as essential for boosting reasoning skills. But DeepSeek shook things up by skipping SFT altogether and going with reinforcement learning (RL) to train their model instead.
DeepSeek is already in trouble: Did DeepSeek steal OpenAI’s AI models to train R1? What are the security implications of using DeepSeek? (As of yesterday the US Navy banned its usage). Why have Europeans already flagged DeepSeek as a massive GDPR risk? Will any of this matter?
OpenAI Launches ChatGPT Gov: Launching right in the middle of the DeepSeek panic, OpenAI has introduced ChatGPT Gov, a version of its AI chatbot for U.S. government agencies. ChatGPT Gov prioritizes security and compliance to meet stringent government compliance requirements and offers features like GPT-4o access and custom GPT creation on secure Azure platforms.

The Supply Aside

📕 Read - Guns, Germs, and Steel: The Fates of Human Societies

It’s the 20th anniversary of Jared Diamond’s classic book Guns, Germs, and Steel. Why did Eurasians conquer and displace Native Americans, Australians, and Africans instead of the reverse? What factors led some societies to stay at the hunter-gatherer stage while others developed writing, technology, government, and weapons of war as fast as a kid playing Sid Meier’s Civilisation? According to Diamond, the answer doesn’t lie with colonial-era race-based theories. Instead, it’s about geography, climate, or the biogeographical advantages that gave certain groups a head-start. In my view, this is one of the best works of popular science ever produced.

What Else I’m Reading

DeepSeek makes a splash: I was tempted to make this whole issue about DeepSeek, but it’s already receiving wall-to-wall coverage. Suffice to say it was fascinating to watch panic take hold of the market even before the potential of China’s LLM had been fully understood. People are calling this “AI’s Sputnik moment”. I’d draw a parallel to SpaceX instead, when the emergence of reusable rockets slashed the cost of something we all assumed was incredibly expensive.
Would you refer a complete stranger? It’s well-known that having a referral from someone within an organization will dramatically boost your chances of being hired. It’s no surprise then, that referrals are now being commodified. Jobseekers are using platforms including ReferralHub, ReferMarket, and messaging boards on Glassdoor and Blind to connect with employees on the inside, who are eager in turn to take a small fee and possibly earn a referral bonus. The problem is, they’re referring complete strangers to their employers.
Brian Moynihan on Regulatory Pushback: In this interview, the CEO of Bank of America talks about the success of his recent cleanup operation, and his future strategy of responsible growth, risk management and long-term stability. He believes the bank’s sustainability push isn’t currently under threat, but believes the organization will ultimately benefit from regulatory rollback under Trump.

📺 Watch - Don’t Die: The Man Who Wants To Live Forever

Bryan Johnson’s attempt to defy death seems… exhausting. Genetic enhancements, plasma swaps, HRV therapy, a strict vegan diet, constant exercise, sleep optimization, rigorous tracking of his biomarkers, mindfulness training, and pills, pills, pills. Yet Johnson’s Don’t Die movement has captured the public imagination. Check out the Don’t Die documentary on Netflix to see what a day in the (very long) life looks like for Johnson and to understand his war with death and its causes. Spoiler: no one escapes death, regardless of how much they invest in living forever.

👂 Listen - HBR on Strategy podcast: Strategies For Managing Talent Amid Uncertainty and Competition

Is everyone an entrepreneur now?

I’ve been a fan of Ben Casnocha and Chris Yeh ever since they wrote The Startup of You. In this podcast episode, they argue that the new world of work (think lack of loyalty from employers and employees, short-termism, uncertainty, and competition) isn’t so different from the typical conditions many entrepreneurs are familiar with.

Hiring and being hired is becoming, in a way, as risky as flying solo. Casnocha and Yeh present their strategy for hiring and retaining top talent within this context based on the importance of building strong internal and external employee networks.

💡 Think - The Right Leadership Can Change Everything

For 24 painful years, my Washington football team (Commanders, aka Redskins) was stuck in the mud under the disastrous leadership of he who shall not be named—Dan Snyder. Bad management, a toxic culture, and one misstep after another defined an era fans would rather forget. But this season? It felt like a fairytale. With new owner Josh Harris and his private equity group, along with a new GM, coach, and a stud QB, we’ve gone from the NFL’s punchline to legit contenders. PE often gets flak for chasing short-term gains, but in this case, they’ve been a force for good—bringing in the right leaders, setting a new tone, and turning things around faster than anyone expected.

It’s a reminder of how leadership can change everything. The right people at the top can transform even the most dysfunctional teams—in sports or business. That said, PE’s reputation for gutting rather than growing organizations is real, and maybe this is just an exception.

The big question now: Was this just a flash in the pan, or the start of something real? I really hope it’s the latter. If we were one step from the Super Bowl in year one, imagine what year two (and beyond) could bring. There will be challenges ahead, but for now, I’m just enjoying the ride.

📕 Be sure to check out my book: Fire the Boss, Keep the Love: 10 Jobs, 10 Exits, 10 Lessons.

Whether you're starting your career or a seasoned pro, this book offers fresh perspectives and actionable advice to help you level up. I delve into my own personal career story and career wisdom from top executives to explore topics including:

Career transition strategies
Building lasting professional relationships
Tips for thriving in diverse corporate cultures

Fire the Boss, Keep the Love is a must-read for anyone ready to take charge of their career journey and forge an authentic path to success. Get your copy on Amazon!

💡 Course: Craft Your Career!

As the world of work continues to evolve rapidly, with a more globalized labor market and many companies reducing headcount, the risk of getting left behind is higher than ever.

Throw in the rapid adoption of AI in the workplace and the rise of remote work, and even the most competent and hardworking leaders and professionals are struggling to keep up.

In Craft Your Career, Aaron Cleavinger and I teach you the skills you need to stay ahead of the curve and craft the career you deserve. Check it out here and enroll: http://craftyourcareer.com/