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Mexico – From a short nearshoring boom to US "security-shoring"

Günther Maihold

No 23/2025, SWP Comments from Stiftung Wissenschaft und Politik (SWP), German Institute for International and Security Affairs

Abstract: With the reconfiguration of international supply chains, Mexico has gained importance as a location for new foreign investments. The country has been able to benefit from nearshoring, that is, the relocation of services or production processes closer to consumer markets. This is associated with lower logistics costs and often better management of supplier relationships. However, this boom in investments has abated due to various uncertainties - not least being Washington's threats to raise tariffs, which burdens the economic prospects associated with nearshoring. Mexican President Claudia Sheinbaum is attempting to counter this trend, but in view of the increasingly urgent demand by the United States for third countries to adopt an anti-Chinese course, Mexico is at risk of being caught in the trap of "security-shoring" and losing its autonomous room for manoeuvre. This is already forcing Mexico - as well as its economic partners who have invested there - to realign their production processes.

Keywords: Mexico; foreign direct investment (FDI); nearshoring; relocation; services; production processes; consumer markets; President Claudia Sheinbaum; Donald Trump; Uniteds States; China; United States-Mexico-Canada Agreement (USMCA); Tesla; Elon Musk; International Monetary Fund (IMF) (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-inv
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:swpcom:319689

DOI: 10.18449/2025C23

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