The migration of manufacturing to Mexico could undermine Trump’s promise to voters that ratcheting up tariffs on China would incentivize companies to bring production back to the U.S and give American companies a more even playing field.

The European Union and Mexico revived a stalled free trade agreement on Friday, days before the return to the White House of Donald Trump, who has threatened both sides with tariffs.

The EU and Mexico on Friday agreed a long-delayed trade deal as they seek to reduce reliance on the US ahead of Donald Trump’s return to the White House. The two sides will modernise their existing agreement just weeks after Trump threatened them with tariffs.

Mexico and the European Union are announcing a revamped agreement that they said would boost trade and investment, amid Trump's tariff threats.