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USMCA Uncertainty Drives Firms From Mexico
1 Sep
Summary
- Tariff threats are pushing companies to reconsider Mexico investments.
- Judicial reform in Mexico raises concerns about the rule of law.
- New foreign investment in Mexico declined in early 2026.
Growing uncertainty surrounding the USMCA trade pact and domestic judicial reforms in Mexico is prompting companies to re-evaluate their investments. Businesses are contemplating pulling out of Mexico and relocating to other regions due to concerns over potential future tariffs and the rule of law, especially after the U.S. declined to renew the pact in its previous form.
This uncertainty is impacting new foreign investment, which saw a significant decline in early 2026 compared to the previous year. Greenfield investment, measuring spending on new facilities, also fell sharply in 2025. While exports to the U.S. remain strong, driven by goods like AI-related equipment, the overall investment climate is being adversely affected.
Some companies are actively diversifying, establishing operations in countries like the Dominican Republic to mitigate risks. Meanwhile, Mexico's President is championing strategies to revitalize manufacturing and boost domestic industries. Despite moderate export growth projections, the lack of a definitive resolution on the USMCA's future continues to be a negative factor for investment decisions.
