Borderlands Mexico: Apparel maker eyes Dominican Republic to save on tariffs

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Apparel maker eyes Dominican Republic to save on tariffs; Mexico’s exports to US fell 2.9% in February; Texas city tightens parking restrictions on tractor-trailers; and Border agents seize almost $24M in drugs at Texas port of entry.

Apparel maker eyes Dominican Republic to save on tariffs

With U.S. tariffs looming for Mexico and Canada, World Emblem is taking steps to reduce disruptions to its North American supply chain with a manufacturing facility in the Dominican Republic.

The Fort Lauderdale, Florida-based apparel maker chose the Dominican Republic city of Santiago for its newest factory due to the country’s business-friendly environment and current tariff-free trade relations with the U.S., officials said.

“We want to diversify a little bit, and we had already started to search for where we were going to do that. The tariffs have just kind of put a sense of urgency to it,” COO Jim Kozel told FreightWaves in an interview. “We’re setting up shop in the Dominican Republic. There are certain production lines in our Aguascalientes [Mexico] factory that we’d like to move to the DR.”

World Emblem is one of the largest patch and emblem manufacturers in the world. The company was founded in 1993 by Jerold Carr. Today, his sons Randy and Jamie Carr lead the business.

The company has 4,250 employees and eight facilities totaling 1 million square feet of manufacturing and office space in the U.S., Mexico, Canada and the United Kingdom.

Another reason World Emblem chose the Santiago location was to capitalize on the DR’s lower cost of doing business compared to Mexico, Kozel said. The new factory is scheduled to be completed by the end of the year.

“We set up shop in Mexico about 18 years ago, and it was to build capacity … . [T]he labor in Mexico was less expensive, and it’s very easy to do business between Mexico and the United States,” Kozel said. “Over the last 18 years, the cost of labor in Mexico has gone up, and the cost of doing business in the country has gone up. It doesn’t mean the labor is bad . … [W]e’ve got great people, and we have 850 people in Mexico, and they’re an awesome team, but it’s not inexpensive labor anymore.”

The Santiago factory will make products that will be shipped for customers in the U.S. market. Some of World Emblem’s clients include New Era, Cintas, Vestis, Perry Ellis and Levi’s.

“We’ll start out with producing blank patches, and as we grow, we’ll move lines … have the growth focus more in the [DR] as we move each line,” Kozel said. “The tariffs may be around forever. The tariffs may not even happen, because you never know until midnight on April 1, whether tariffs are going to happen or not. But either way, we’ve grown about as big as I’d want to get in any one country.”

The Dominican Republic is a Caribbean nation of about 11.3 million people. The country has several cargo ports, including Santo Domingo, Haina, Caucedo and Puerto Plata.

Santiago, with a population of 771,748 people, is in the northern part of the country. The city is a major industrial hub, attracting foreign investment through its free trade zones.

Multinational manufacturers with factories in Santiago include New Jersey-based Johnson & Johnson, Ohio-based Cardinal Health, Ireland-based firms Medtronic and Eaton Corp., and Germany-based BBraun.

In 2024, foreign-owned factories in the Dominican Republic exported goods worth $12.9 billion, an 8.3% year-over-year increase from 2023, according to the Export and Investment Center of the Dominican Republic.

“The relationship with the DR and the United States, where it’s different from Mexico, is that the Dominican Republic imports more from the U.S. than they export,” Kozel said. “So you’re not caught up in this whole tariff situation, because in reality, that would hurt the United States more than help them. The DR is easily accessible. There’s just a lot of wins all the way around.”

Related: Trump threatens ‘far larger’ tariffs on EU, Canada if they jointly retaliate

Mexico’s exports to US fell 2.9% in February

Mexican exports to the U.S. fell 2.9% overall year over year in February, led by declines in shipments of cars and light trucks, agricultural products, and oil, according to the National Institute of Statistics and Geography (INEGI).

The total value of manufacturing exports from Mexico in February was $44.24 billion, a 1.8% year-over-year decrease compared to the same period in 2023.

Foreign sales of automotive goods produced in Mexico declined 15.2% year over year in February, agricultural product sales fell 6% year over year, and oil sales fell 24% year over year, INEGI reported.

Texas city tightens parking restrictions on tractor-trailers

San Antonio’s City Council approved an ordinance March 20 adding more parking restrictions on tractor-trailers.

The South Texas city, which already prohibits parking tractor-trailers on residential streets, has included 19 nonresidential roadways as restricted areas. Violators of the new ordinance could face fines of up to $500.

The ordinance will go into effect on April 19. Truckers will be given a 60-day warning period before drivers are fined. Citations will be issued after 90 days.

Border agents seize almost $24M in drugs at Texas port of entry

Authorities in South Texas recently uncovered two attempts to use commercial trucks to move methamphetamine and cocaine across the border at the Roma-Ciudad Miguel Aleman International Bridge.

On March 5, U.S. Customs and Border Protection (CBP) agents were inspecting a truck arriving from Mexico hauling a load of bottled water when they discovered 1,632 bottles containing 2,269 pounds of alleged liquid methamphetamine. The narcotics have a total estimated street value of $20.3 million.

CBP seized the narcotics and tractor-trailer and turned the case over to Homeland Security Investigations.

On March 19 at the same bridge, CBP officers were inspecting a tractor-trailer hauling a mixed shipment arriving from Mexico and found 110 packages containing 275 pounds of alleged cocaine concealed within the shipment.

The alleged cocaine has an estimated street value of $3.6 million.

CBP turned the narcotics, tractor-trailer and driver over to the Roma Police Department. Roma is located about 230 miles south of San Antonio.

The post Borderlands Mexico: Apparel maker eyes Dominican Republic to save on tariffs appeared first on FreightWaves.