Bob's Printer Replacement Parts, Inc. (not the company's real name) was headquartered in the Southwest United States.  The BPRP, Inc. makes replacement parts for copiers and printers, but has moved production to Mexico. While all research, development and admin staff remains in the company's U.S. headquarters, all production has moved to Mexico. 

A predominant reason for this move is the foreign Value Added Tax.

Before the move, BPRP, Inc. had 140 employees.  Now, the company employs only 10 - 12 in the U.S.  The company has outsourced to other companies in Mexico, so they have only 65 employees there.

BPRP, Inc. moved to Mexico because of the government subsidized competition from China. Initially, the company was able to stay in the Southwest, but ultimately, the combination of low labor costs and the Value Added Tax prohibited BPRP, Inc. from competing. 

The owner of BPRP says that the IVA tax ( Mexico's value added tax) provides an added incentive to offshore to that country.  The IVA tax works as follows: everything purchased in Mexico is subject to a 15% IVA tax. However, a company can apply to the government for a rebate of the tax for goods purchased with the goal of making exports. If the product is sold inside of Mexico, then the company is not eligible for the rebate. The owner of BPRP stated that he believed that the purpose of the IVA tax was to provide employment opportunities for the people of Mexico while preventing  competition for Mexican companies. The tax encourages foreign companies to buy Mexican products but not to sell and compete with local companies. 

BPRP's owner stated that he would have loved to have kept everything in the US and saved the jobs of his friends and colleagues.  But ultimately, he had to look at the long term viability of the company. 

As a result of the move, the owner of BPRP, Inc. has to do quite a bit of traveling--more than he wants to do. He has a wife and family and has to spend as much as three months at a time in Mexico.

Furthermore, the owner had a relationship with his employees.  That relationship has ended.  Many of those employees have still not found new work.  

The story of BPRP, Inc. is common--a direct result of current trade policies.