Exploring Nearshoring in Mexico: Trends, Challenges, and Growth Prospects

The origin of nearshoring in Mexico, along with the trends, challenges, and growth prospects, were analyzed during the third Industrial Warehouse Summit in Pharr, Texas.

Jorge Torres, president of Interlink Trade Services, highlighted in his presentation the absorption of $36.1 billion as part of the Foreign Direct Investment (FDI) that arrived in Mexico in 2023. The United States led with $13.6 billion, followed by Spain with $3.7 billion, Canada with $3.4 billion, Japan with $2.9 billion, and Germany with $2.4 billion.

As part of this growth, Torres, a certified customs broker in the United States, examined China's participation. "This Asian country was not among the top investors in 2023, contributing only $151 million compared to the billions from other countries. However, we see a positive growth outlook, especially in the automotive industry over the coming years, particularly in electric vehicles, which could influence trends."

In this context, Torres noted that the Mexican Ministry of Economy announced around 378 FDI projects in 2023, totaling $110.7 billion, expected to be executed over the next two to three years. Chinese investment in this scenario could rise to $11.2 billion.

Looking ahead to 2024, the expectation is that investment amounts from these and other countries will increase, potentially surpassing $40 billion.

However, the presidential elections in Mexico and the United States in 2024, current tensions between China and the United States, and the renegotiation of the US-Mexico-Canada Agreement (USMCA) in 2026 will be key factors in determining China's importance in Mexican nearshoring. "Mexico imposed tariffs on various products at the end of April, which we believe is part of the U.S. government's pressure to counter the import of Chinese products into Mexico. Recently, the United States announced an increase in tariffs on several Chinese products, which could impact the renegotiation of the USMCA. We foresee the United States trying to curb Chinese investment in Mexico to prevent Mexico from being a springboard for China into the United States," Torres stated.

In this scenario, Torres detailed that in 2023, states like Nuevo León, Coahuila, and Guanajuato absorbed the most Chinese investment.

Furthermore, Torres emphasized the various competitive advantages Mexico offers for nearshoring, which are attractive not only to China but also to other countries. These advantages include proximity and connectivity to the world's largest consumer, the United States, a young and experienced workforce, competitive wages, and specialized manufacturing programs such as the IMMEX (Manufacturing, Maquiladora and Export Services Industry) and PROSEC (Sectoral Promotion Programs) that promote the economic development of companies.