Mexico’s nearshoring sector is stable amid shifting trade policies and political uncertainties. Although new foreign investments have slowed since their peak in 2021, reinvestment in existing operations has nearly doubled, reflecting long-term market confidence.
Nearshoring growth slows but stabilizes
Between 2020 and 2024, more than 1,200 national and foreign companies entered Mexico’s industrial real estate sector, absorbing nearly 13 million square meters of space. Today, foreign firms led by Bosch, Amazon, and Kenworth have already expanded their footprint by 115% despite a 67% drop in new entrants.
The northern and Bajío regions remain nearshoring hubs, with Monterrey and Guadalajara leading industrial growth. Although trade uncertainties persist, Mexico’s proximity to the U.S., cost efficiencies, and a strong supply chain continue to attract global investment.
Trump’s tariff plan raises industry concerns
U.S. President Donald Trump’s proposed tariffs of 25% on imports from Mexico and Canada and 10% on Chinese goods have raised concerns for Mexico’s nearshoring and business process outsourcing (BPO) sectors. The automotive and electronics industries, heavily reliant on U.S. trade, are particularly vulnerable.
Despite Trump’s goal of reshoring production to the U.S., experts argue that rapid relocation is impractical due to significant infrastructure investments and logistical considerations. Many multinational corporations, including General Motors and Ford, are expected to oppose broad tariff measures.
Analysts suggest that Trump’s tariff threats might act as leverage for upcoming negotiations on the United States-Mexico-Canada Agreement (USMCA) in 2026. Meanwhile, Mexico remains a strategic alternative to China for companies seeking supply chain resilience and cost advantages.
Mexico signals possible retaliation to tariffs
Mexican President Claudia Sheinbaum has warned that Trump’s tariffs could lead to job losses and economic instability in both countries. She stressed that increased trade barriers would raise costs, disrupt supply chains, and threaten industries deeply integrated with the U.S. economy.
Sheinbaum signaled Mexico’s willingness to negotiate but cautioned that retaliatory measures could follow if tariffs are imposed. She also pointed to Mexico’s efforts in addressing U.S. concerns, including drug trafficking and border security.
Mexico’s automotive sector, responsible for over 35% of the country’s manufactured exports, would be among the most brutally hit. With nearly 80% of Mexican-produced vehicles destined for the U.S., automakers face tough choices on absorbing costs or passing them on to consumers.
Mexico looks beyond the U.S. for trade stability
In response to trade uncertainties, Mexico is diversifying its global partnerships by strengthening ties with Europe, Latin America, and Asia.
“We are not only looking to the north but also to the south and to the European continent,” Sheinbaum said, reinforcing Mexico’s commitment to economic stability.
Industry leaders remain confident that Mexico’s nearshoring and BPO sectors will thrive despite the challenges. With its skilled workforce, established infrastructure, and strategic location, Mexico remains vital in global trade, even with shifting geopolitical conditions.
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Epelbaum, I. (2025, March 18). Tariff Fallout: Is This the End of Nearshoring? Mexico Business. Retrieved March 27, 2025, from https://mexicobusiness.news/trade-and-investment/news/tariff-fallout-end-nearshoring
