Nearshoring in Mexico at risk due to Trump’s plans and AMLO’s reforms: analysts

The outlook for Mexico has become encouraging with nearshoring. Between last year and the first half of 2024, announced foreign investments in the country amount to 156,208 million dollars, but this moment may last less than expected and may not achieve the longed-for economic growth and higher-quality jobs that have been mentioned so much.

Donald Trump has promised to bring back to the United States the value chains, the jobs and the investments that China and Mexico have taken away, and he has even put on the table the reduction of the corporate tax rate from 21% to 20%.

He has also called for imposing tariffs of more than 10% on all US imports.

For Ana Gutiérrez, coordinator of Foreign Trade at the Mexican Institute for Competitiveness (IMCO), the issue of Trump and his possible return to the presidency of the United States has raised much speculation, generating uncertainty, a factor that is very important for investors.

“There is always some level of uncertainty when there are new administrations, (…) particularly with someone like Trump, who has a certain kind of geopolitical and commercial vision,” he notes.

There is the example of the recent suspension of construction of the Tesla plant in Santa Catarina, Nuevo León, with a planned investment of 10 billion dollars.

The reason given by Elon Musk is that it makes no sense to have a factory in Mexico if Trump imposes tariffs.

Guiéterrez says that we need to be very attentive to this, but he does not mean that this will happen with all the investments that have been announced.

Goodbye to nearshoring in Mexico?

Verónica Ortiz, a lawyer and political analyst, says that Mexico is indeed at risk if Trump wins.

In his participation in a discussion panel held by Expansion already express question about the ‘farewell’ of the nearshoring (from Mexico) in the event of Trump’s arrival at the White House, Ortiz said that the relocation will rather take place in the United States.

“We wouldn’t be being alarmist by saying this. Trump has to be believed, no matter how crazy something sounds, when he says it, it’s because he’s already thought about it and because it’s his way of dealing with the problem and he’s convinced that he’ll get away with it,” he said.

Ortiz mentions that another factor that plays against Mexico is the figure of JD Vance, who has been chosen by Trump as vice president.

This is because Mexico is linked to two issues that marked her personal life in Ohio: her mother’s drug addiction and her grandfather’s loss of employment, because the steel plant where he worked closed, witnessing the departure of many companies to Mexico and China.

“What may be an idea in Trump’s case is a life conviction in JD Vance’s case and I am going to focus on those two issues that unfortunately are the ones that bring Mexico into the picture.”