Meet the Parties Cashing in on the AI Boom on the Southern Border

They all want AI hardware across the U.S.-Mexico border, but they all disagree on who can trade and under what conditions the hardware can enter.

Meet the parties involved in the booming AI hardware trade happening on the Southern border: U.S. importers and businesses are navigating an ever-changing trade landscape; Mexican producers and shippers are eager to cash in on the AI boom, Chinese firms are taking advantage of loopholes among tightening trade restrictions, and U.S. lawmakers are wanting to stop a flood of Chinese imports and bolster North American manufacturing.

U.S. firms - Since April 2025, countless business owners, manufacturers, and importers have scrambled to reorganize supply chains, ensure trade compliance, and budget for dramatically higher import duties in the face of the administration's trade war. Duties levied by U.S. Customs and Border Protection, social media announcements from the President, rules from the Department of Commerce, and tariffs designed by the U.S. Trade Representative have created a chaotic and confusing commercial environment for firms of all sizes. Now, companies interested in the data center and AI upturn must confront the learning curve of the novel technology and legal conditions for importing necessary parts.

Mexican and Chinese manufacturers - Further south, commercial sites across northern Mexico have popped up in recent years. These warehouses, factories, and industrial parks house large numbers of Chinese and Chinese-backed manufactures, where products like home furniture, consumer electronics, and now hardware for AI technology and data centers are made. Chinese investors and manufacturers have chosen Mexico for its proximity to U.S. markets, lower labor cost, and most importantly, the possibility to take advantage of United States-Mexico-Canada Agreement (USMCA) duty exemptions and reductions.

Policymakers and regulators - In Washington, officials have increased trade restrictions drastically since Trump’s second term. Several waves of tariffs have been announced, negotiated, and removed – all of which carry different stipulations and implications. For example, some automotive parts could be exempted from any Section 232 tariff if they are USMCA certified, but they may still face tariffs under Section 301. Furthermore, certain goods may face a higher overall price from what is called “tariff stacking,” the result of adding multiple tariffs together. These intricate rules have created headaches for firms’ finances, operations, and legal compliance.

While there are many known and unknown motivations behind the recent deluge of import restrictions, national economic security stands out as a key driver of these policy changes.

Trump’s “America First” platform prioritizes, among other goals, national security through an approach centered upon developing economic resilience, scientific advancement, and IP innovation and integrity while nearshoring operations and increasing U.S. jobs in these processes.

Given these objectives, it is no surprise that Washington is once again pressuring Mexico. This time, U.S. officials have proposed restrictions regarding the origin and sourcing of components in the production of AI hardware and technology – goods that have surpassed automotive parts to become Mexico’s largest export to the U.S. The proposal includes restrictions on how much non-North American components AI hardware can contain. This is in order to reduce China’s influence in critical technology and infrastructure for the United States.

Negotiations on hardware components and other advanced technology will evolve as discussions between Canada, Mexico, and the U.S. continue regarding the future of the USMCA, an agreement that the U.S. opted out of extending. What is more, concrete outcomes of these negotiations are also contingent upon soured U.S.-Canada relations will likely be impacted by midterm elections and data center opposition in the U.S.

U.S. investors are seeking gains from the AI and data center boom, U.S. importers are navigating transient import controls and duties, Mexico wants manufacturing growth, and Chinese officials and exporters covet continued access to the lucrative U.S. market despite the ongoing trade war… and U.S. authorities want to sideline China as a shift in domestic politics sits on the horizon.

These dynamics exemplify that in the twenty-first century, no economic exchange happens in isolation, and that everyone wants in on the flashy new technology.