Using confidential longitudinal firm-level trade data from Mexico (2015–2021), we examine whether the 2018-19 US-China trade war triggered adjustments in Global Value Chains (GVCs) and nearshoring to Mexico. Leveraging the abrupt US trade policy shift as a natural experiment, we construct firm-level trade policy exposures based on pre-shock product portfolios and find that US tariff hikes on China significantly increased Mexican firms' exports to the US, imports from Asia and the US, and net exports overall. By distinguishing firms in GVCs and identifying their parent countries, we show that foreign Multinational Enterprises (MNEs) in technology-intensive industries were the primary drivers of this adjustment. The trade war also reshaped sourcing patterns, boosting the use of firm-specific duty permits. Heterogeneous responses between US and non-US MNEs highlight nearshoring dynamics and GVC reorganization toward Mexico. Our findings provide firm-level evidence of the transformative impact of trade policy on GVCs and the role of MNEs in channeling trade policy spillovers to third countries.