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an indicator that expresses whether foreign organizations still invest in the country—show a 40 percent drop, to US$74 billion in 2020 from US$120 billion in 2019, and an additional 45 percent fall to US$41 billion in 2022, the lowest level since 2010.
China still represents 31 percent of global manufacturing, but more and more organizations are leaving that country, which is unleashing great competition between potential recipient countries of those businesses.
The relocation to Mexico began in 2018 when former President Donald Trump imposed a 25 percent tariff on imports from China; Then many American companies decided that it was more convenient to take their facilities to Mexico, due to the proximity and for other important reasons, such as the cost of labour, which is rising every day in China; the impact of the trade war between Washington and Beijing and the advantages of the North American Free Trade Agreement which came into effect in 2020.
As an attentive observer of this phenomenon, in recent times, the Inter-American Development Bank (IDB) is promoting the installation of
companies in Latin America, such as Mexico, for which it has already invested nearly US$4 billion.
take advantage of the Mexican Boom
This is how in 2023 Mexican exports to the United States increased by almost five percent, while Chinese exports had a deep drop of 20 percent compared to the previous year.
Gabriela Siller, director of economic analysis at Banco BASE, of Mexico, explains that: “Mexican exports could have increased much more,” because in her opinion, Mexico lacks factories, that is, installed capacity in its territory, in addition of “an increase in public insecurity, added to the uncertainty regarding internal economic policy.” The expert added that: “If Mexico doesn’t get its act together, other countries will be the ones that will take advantage of the opportunity.”
For his part, the current Undersecretary of Transportation in the Mexican Ministry of Transportation, Rogelio Jiménez Pons, said that his country needs an investment of more an investment of more than US400 than than US400 billion in infrastructure by 2032 to be able to take full advantage of the relocation of companies,
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