Capacity and location set Odessa apart in a post-tariff economy

Manufacturing businesses assessing a move or return to the United States ahead of proposed tariffs need an ideal location. A domestic manufacturing site in Odessa, Texas, is perfect for those operations due to its numerous advantages and capacity.

The possibility of 25% tariffs on U.S. imports from Mexico and Canada have moved from casual discourse in 2024 to the forefront of American policy as President Donald J. Trump’s administration considers imposing them as early as February 1. Whether relocating or establishing a new manufacturing site, a move to Odessa will minimize tariff impacts and associated supply chain disruptions whenever tariff impacts occur.

Impacts of potential tariffs on manufacturing businesses

The 25% tariffs under consideration would immediately impact the bottom line for companies in Mexico and Canada. Associated price hikes could discourage consumer purchases, and domestic manufacturers relying on parts may seek new suppliers in countries without the burden of added import tariffs. According to Texas-based economists The Perryman Group, vehicles, electric machinery, nuclear reactors and parts, and fuels are top imports from Mexico. These imports reached $475.2 billion in 2023, with a blend of products and manufacturing components contributing to the total. 

For Mexico-based companies frequently utilizing cross-border supply chains, a loss of comparative advantages due to tariff-related costs would further increase the appeal of domestic businesses or alternative international enterprises for buyers. Relocating to Odessa in whole or part would reduce the impact of tariffs on the supply chain. 

A tremendous example is currently underway by GCC, a leading cement and concrete producer in the U.S. and Mexico. While developed well before the current tariff conversation, the expansion of GCC’s Odessa cement facility offers a roadmap for manufacturers weighing operation locations today. In a 2022 press release when the project was announced, GCC stated cost savings were a significant consideration for their $750 million capital investment.

“... The market is developing faster in the U.S. and represents large freight savings, compared to the plant located in Chihuahua, Mexico,” the release said.

Relocation advantages in Odessa

Energy capacity keeps Odessa businesses humming

The time required to reach full capacity at a new manufacturing site is a central consideration when planning a relocation. Decades as a top producer of oil and natural gas coupled with recent growth in solar and wind make obtaining the consistent energy required to power new enterprises easy in Odessa. Ongoing investments in renewable energy will continue to boost the power grid while oil and gas ensure a steady supply no matter the weather.

Odessa streamlines moving or starting a business

Governmental entities in Odessa support business relocation and development and employ many streamlined processes to reduce wait times for key administrative needs. Obtaining the required business permits can happen in as little as two to eight weeks. Odessa Development Corporation is also a resource ready to help with relocation and maintains a directory of available building sites and industrial spaces to simplify site selection.

Connected location aids in maintaining supply and distribution chains

Relocating a manufacturing enterprise requires considering supply chain impacts and distribution. Local companies provide many raw materials, including oil, carbon and sand, and new businesses are increasing access to parts and machinery. Odessa is committed to manufacturing growth and actively pursues new enterprises to augment the marketplace, making it easier for businesses to succeed.

Delivery of additional supplies and transportation of products is simplified by easy access to Union Pacific rail lines and Interstate 20 – many of the same distribution channels utilized for transporting goods imported from Mexico. In some instances, the business site may change while fulfillment remains consistent or improves, mitigating the impact of a move on buyers.

To learn more about the benefits of relocating to Odessa from Mexico with or without a 25% tariff on goods, contact Odessa Development Corporation today.