Made in Mexico
In 2023, Mexico surpassed China as the biggest exporter of goods to the U.S.
According to the U.S. Commerce Department, the value of goods imported by the U.S. from Mexico rose nearly 5% from 2022 to 2023 to more than $475 billion, while imports from China fell 20% to $427 billion.
The deterioration of U.S.-China relations has led many businesses to consider nearshoring – where companies outsource tasks to neighboring or nearby countries rather than distant offshore locations – to reduce costs and their company’s reliance on China.
Nearshoring to Mexico is a hot trend:
- Dell and Hewlett Packard Enterprise asked their suppliers to move some server and cloud computing technology to Mexico
- Telas plans to build a manufacturing plant in Mexico
- General Motors is investing more than $1 billion in its automobile factory in Ramos Arizpe, Coahuila, Mexico
While Transportation still receives the most manufacturing foreign direct investment in Mexico, sectors like Computer Equipment have also grabbed investors' attention.
U.S. companies are not the only ones teaming up with Mexico: Taiwanese companies are increasingly looking to Mexico as a third-party partner:
- In February, Foxconn said it spent about $27 million to acquire land in Mexico to expand its AI server production
- Taiwan officials estimate there are about 300 Taiwanese firms in Mexico that employ 70,000 people.
All this nearshoring activity is set to add some extra guac to Mexico’s GDP – as much as 3% in the next five years.
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