Mexico shines in the rise of nearshoring amid US-China dispute.

The sparks of industrial machinery illuminate Mexico's economic landscape, which appears to be the big winner in the growing tensions between the United States and China. Amid the rise of "nearshoring," the transfer of some production to destinations close to the final market, Mexico positions itself as a strategic destination for foreign investments in the manufacturing sector. The country has experienced a significant shift in its trade relationship with the United States, replacing China as the main source of American imports. This phenomenon has been driven by a combination of factors, including cheaper labor, tax incentives, and the presence of the free trade agreement among North American countries, now known as T-MEC. Humberto Martínez, president of the National Council of the Maquiladora and Export Manufacturing Industry (INDEX), points out that Mexico is in the midst of a "nearshoring boom," with projections of receiving foreign investments worth $9 billion in the export manufacturing sector this year. This influx of foreign investment could reshape the global economic order, according to Martínez. Mexico's attractiveness is reinforced by the tensions between the United States and China, which have led many companies to rethink their operations and seek a more stable environment closer to the American market. The geographical proximity, along with existing infrastructure and available human talent, make Mexico a privileged site for the expansion of the manufacturing industry. In Mexico's industrial north, maquiladoras have historically been an engine of the economy, processing and assembling products destined for the American market. Companies like Aztec Technologies in Monterrey are gearing up to meet the growing demand for manufacturing services, with clients such as John Deere and Honeywell. Foreign direct investment in Mexico has reached record levels, surpassing $36 billion in 2023, with a significant portion coming from the United States. In regions like Nuevo León, there is an increase in investments from different countries, consolidating Mexico's position as an attractive destination for the manufacturing industry. Renowned companies like Foxconn, Lego, and Mattel have already announced expansions related to nearshoring in Mexico, highlighting the growth potential in the sector. Despite the challenges faced by companies looking to establish themselves in Mexico, such as security, water scarcity, and labor requirements, the momentum towards nearshoring seems unstoppable. In a context of global geopolitical and economic uncertainty, Mexico emerges as a key player in reshaping supply chains and attracting foreign investments in the manufacturing sector. The future of the Mexican economy seems to be marked by greater diversification and strengthening of its industry, in a scenario where tensions between the United States and China open up new opportunities for the country.