July 12, 2025 MexicoCRE - MexicoFDI - Newsletter Edition

📖 Record-High Mexico FDI 2025

Mexico reached a record-high foreign direct investment (FDI) of $21.4 billion in the first quarter of 2025, marking the highest quarterly inflow in its history . This figure represents a 9% increase over the same period in 2024 and a 5.4% rise from the previous record, despite global economic headwinds and protectionist U.S. trade policies.

Key drivers and composition:

• Reinvested profits: 79.5% of FDI inflows

• Intercompany accounts: 13.1%

• New investments: 7.4%, with a 165% increase in new investments compared to the previous quarter.

Main source countries:

• United States

• Germany

• Canada

Top sectors benefiting:

• Manufacturing

• Financial services

• Mining

• Electronics and semiconductors

• Electromobility

• Pharmaceuticals

• Medical devices

• Clean energy and the circular economy

Government initiatives:
The Plan México and the development of “well-being hubs” (industrial corridors) have been central to this growth, providing tax incentives and preferential conditions for strategic sectors. Fourteen such hubs have been approved across northern, central, and southeastern Mexico, with tendering processes underway for their construction.

Notable corporate investment:
Unilever announced a $1.5 billion investment to complete its Nuevo León factory and expand operations in Mexico.

Geographic highlights:
States benefiting from these new industrial corridors include Quintana Roo, Michoacán, Veracruz, Tlaxcala, Tamaulipas, Sinaloa, Puebla, Hidalgo, Guanajuato, México state, Durango, Chihuahua, and Campeche.

This record FDI underscores Mexico’s resilience and attractiveness for international investors, driven by its proximity to the U.S., the USMCA framework, and proactive government policy supporting nearshoring and industrial diversification.

🌎 Impact of U.S. Policies on Mexico’s Investment Growth

Overview

U.S. policies in 2025 have had a profound and multifaceted impact on Mexico’s foreign direct investment (FDI) growth. The relationship is shaped by a mix of trade agreements, protectionist measures, nearshoring incentives, and evolving geopolitical priorities.

Key U.S. Policy Drivers

1. USMCA (United States-Mexico-Canada Agreement)

• Foundation for Stability: USMCA continues to provide a stable legal and regulatory framework, encouraging cross-border investment and trade.

• Rules of Origin & Content Requirements: The agreement’s rules incentivize greater North American content in exports, pushing companies to invest in Mexican facilities to meet compliance and benefit from tariff-free access.

• Investment Protection: Updated dispute settlement mechanisms and sector-specific protections (e.g., automotive, infrastructure) give investors confidence.

2. Nearshoring and “Friendshoring” Initiatives

• Shift from Asia: U.S. policies encouraging companies to relocate supply chains from China to North America have made Mexico a prime destination for manufacturing investment.

• Sectoral Impact: The biggest beneficiaries are automotive, electronics, machinery, medical devices, and clean energy sectors, with U.S. companies leading many new projects.

3. Protectionist and Security-Driven Measures

• Tariff Threats: Recent U.S. tariff frameworks have increased uncertainty, with Mexican exports facing potential tariffs up to 23%. However, Mexico still enjoys a much more favorable position compared to China, whose exports to the U.S. face tariffs above 125%.

• Security-Shoring: The U.S. has increased scrutiny of foreign (especially Chinese) investments in Mexico, pressuring Mexico to align its investment review mechanisms with U.S. national security interests.

• Bilateral Cooperation: Enhanced cooperation between U.S. and Mexican authorities on national security reviews and sensitive sectors is influencing which investments are approved.

4. U.S. Domestic Reshoring Policies

• “Made in America” Incentives: U.S. initiatives to reshore manufacturing—through deregulation and financing—create both competition and opportunity for Mexico. While some investment is drawn back to the U.S., Mexico’s proximity, cost structure, and USMCA advantages help it remain attractive, especially for advanced manufacturing and supply chain resilience.

Mexican Policy Responses

• Plan México: Mexico’s government has proactively adapted, launching “Plan México” to reduce dependence on Chinese imports, increase domestic value-added, and align more closely with U.S. supply chain and security priorities.

• Development Hubs: Targeted incentives, industrial parks, and regulatory reforms are designed to attract U.S. and allied investment, especially in sectors most affected by U.S. policy shifts.

Outcomes for Investment Growth

Conclusion

U.S. policies are the single most important external factor shaping Mexico’s investment landscape in 2025. The combination of USMCA, nearshoring incentives, and security-driven cooperation has fueled record FDI inflows, especially from U.S. companies. However, ongoing tariff threats, protectionist rhetoric, and the need for regulatory alignment create both opportunities and challenges for sustained growth. Mexico’s proactive adaptation—through Plan México and targeted industrial policies—has helped it capitalize on these trends, but the outlook remains sensitive to further shifts in U.S. policy direction

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Thank you for reading our edition of the MexicoCRE Newsletter. Stay tuned for more updates and investment opportunities! 🙏