Borderlands Mexico: Nearshoring Investments Still Thriving South of the Border
Despite the current uncertainties in global trade relations, foreign direct investment (FDI) in Mexico has reached a record $21.4 billion in the first quarter of 2025, marking a 5.4% increase from the same period in 2024. Companies from the U.S. were the largest investors in Mexico during this period, contributing 38.7% of the total FDI, followed by Spain and the Netherlands. Investments from the U.S. and Canada combined represented 42.4% of the total, with the manufacturing sector attracting over 40% of the country’s FDI in the first quarter.
Mexico continues to benefit from the global trend of nearshoring, especially as companies reevaluate their reliance on manufacturing in Asia. Jordan Dewart, CEO of Redwood Mexico, the cross-border shipping arm of fourth-party logistics provider Redwood Logistics, stated that there has been a resurgence in nearshoring to Mexico. Many manufacturers are shifting their supply chains from Southeast Asia to Mexico, viewing it as a more sustainable long-term solution.
However, despite Mexico’s positive momentum, nearshoring in the country faces significant challenges, including security concerns, infrastructure needs, and trade policy uncertainties. Eric Baker, a transportation attorney at Frost Brown Todd, emphasized that the uncertainty caused by tariffs and disruptions like the COVID-19 pandemic impacts long-term investment decisions, as manufacturers typically plan their supply chain strategies years in advance.
Jacob Shapiro, director of research at The Bespoke Group, highlighted the challenges Mexico faces in building the necessary infrastructure to accommodate the increased manufacturing activity. He also noted that policy uncertainty, particularly during the Trump administration, could undermine trade confidence in North America and the United States-Mexico-Canada Agreement.
Amidst these challenges, nearshoring should be viewed as a long-term trend rather than a short-term phenomenon, according to Shapiro. He believes that Mexico stands to benefit significantly from nearshoring over the coming decades. Dewart echoed this sentiment, expressing optimism about Mexico’s long-term prospects and its position as a winner in trade wars.
In recent developments, Buhler Group, a Swiss industrial agricultural equipment manufacturer, has initiated the construction of a $24 million plant in TorreĂłn, Mexico. This facility, the company’s first manufacturing plant in Mexico, will create 200 jobs and support Buhler’s grains and food business growth in the Americas. Frisa, a steel manufacturer, recently opened a $350 million hot rolling steel mill in Monterrey, Mexico, generating over 450 jobs and expanding its steel production capacity.
Additionally, NRS Logistics America Inc. has launched the Chemical Logistic Park in Casa Grande, Arizona, with a total investment of $90 million. This logistics hub will serve semiconductor and electric vehicle battery manufacturers and suppliers, as well as industrial chemical markets. NRS Logistics America specializes in providing transport, storage, and distribution services for the chemical and industrial markets.
In conclusion, Mexico’s nearshoring investments continue to thrive, with companies recognizing the country’s potential as a strategic manufacturing hub. Despite challenges, Mexico remains an attractive destination for foreign investment, positioning itself as a key player in the evolving landscape of cross-border trade and trucking.
