Mexico’s foreign direct investment spike explained

MXPE Weekly Essentials ft. the farmer-teamster shut down, financial crackdown deepens, and other highlights in Mexican politics, policy, and markets from the past week.

MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Uncharted Mexico: Real-shoring?

For years Mexico waited expectantly for the arrival of “nearshoring”—investments to replace manufacturing capacity in global supply chains relocating away from China. Now that the term has fallen out of fashion the shift seems to be beginning to materialise.

The shifting of supply chains has gone from talk to action. Companies, including carmakers like GM, are making expensive moves out of China as geo-political tensions and its trade war with the US heat up. At the same time, the fears around a new and overpowered left-wing government in Mexico and its relationship with Donald Trump have somewhat toned down. The result has been a significant increase in foreign direct investment (FDI) in Mexico.

The trend has switched from the previous state of FDI.