Mexico has attracted record levels of foreign investment without stabilizing its public accounts or converting the current industrial boom into inclusive social prosperity. By the end of 2025, the country had broken the historical ceiling for capital inflows, exceeding 40.9 billion dollars. These resources have been concentrated on the relocation of supply chains. However, public debt has also increased, reaching close to 52.3% of GDP at the same time. Commercial euphoria contrasts with an ever more fragile fiscal reality that multiplies vulnerabilities as the review of the USMCA advances, scheduled for July 2026. This structural tension is central to the Mexican nearshoring boom, raising questions about its sustainability.
Nearshoring: Reactive and Dependence-Intensive, Far from Sovereignty
Investment figures are staggering, but there is still a long way to go in terms of quality. Nearshoring has not been the result of an exercise in sovereign industrial policy, but rather a reactive response to geopolitical tensions and trade tariffs from Washington. The Bank of Spain and ECLAC estimate that Mexico is the main beneficiary of trade diversion from Asia, capturing more than 72% of regional investment that has entered the nearshoring dynamic. However, the national productive structure is not escaping from the low–value–added segments that prioritize final assembly for export purposes over technological absorption.
In this way, a labor market dualism has been established that reproduces the structural gap: while there is full employment in manufacturing in the north, real wages do not keep pace with productivity growth. According to recent data, the manufacturing industry has grown 1.2% in productivity in the first half of 2025, but the sector’s average hourly wage remains at around $4.20. This “spurious competitiveness,” based on wage compression and not on innovation, forces efficiency gains to be captured practically in full by foreign corporate headquarters, severely limiting the multiplier effect on domestic consumption.
The Hidden Fiscal Crisis: Investment Without Taxation Proportionate
The fiscal conflict is the most serious and least visible conflict generated by this model. Far from an increase in revenue following the boom in investment, fiscal collection is stagnant and anchored at 14.6% of GDP according to CIEP estimates, with Mexico’s official 2025 fiscal criteria. This share is insufficient to finance the infrastructure that the industry itself is demanding. In its latest Regional Sector Outlook, BBVA México itself warns of the problem: there is industrial dynamism in regions like the north of the country, but there are still great gaps in infrastructure and access to credit that condition the potential for growth. The federal government has bet on generalized tax incentives, such as the relocation decree, which allow companies to make immediate deductions for the purchase of fixed assets, on the premise that volume activity would compensate for the lower tax burden.
Multinational corporations are adept at optimizing their global tax structure by locating profit centers in countries where they pay little or no tax while their Mexican operations are cost or assembly centers. Lower revenue leads to greater indebtedness, which in turn reduces fiscal space for complementary public investment.
The macroeconomic scenario for the year 2025, as it is closing, points to the end of the post-pandemic rebound. The IMF revised its growth forecast for Mexico downwards to a timid 1%, much lower than the dynamism of other emerging markets such as Vietnam or India. The Mexican economy is growing at two disconnected speeds, with a dynamic north integrated into the Texas value chain while the south remains static and dependent on public transfers. The current Mexican nearshoring has not been the bridge between these two geographic realities.
Infrastructure: Critical Bottleneck
The lack of complementary public investment is a critical bottleneck that threatens to neutralize most of the potential benefits that the phenomenon could have in the near future, warns México Evalúa. The programmed public physical investment of 2025 has reached a historical low of only 2.3% of GDP. This austerity in energy and logistics infrastructure is slowly eroding the country’s systemic competitiveness. The Industrial Parks Association reports saturation of power transmission capacity and water shortages in priority regions such as the Bajío and the north, which forces private firms to self-supply infrastructure costs that are assumed by the state in competitor countries.
The energy and water crises in northern Mexico are not a temporary phenomenon but a structural one. The need for cheap electricity and abundant water—two commodities that the Mexican state cannot guarantee in sufficient quantity or at competitive prices—pushes companies to self-invest in solar panels, water-capture systems, and generators, increasing operating costs. By comparison, Vietnam or other Asian countries offer comparable state-supplied infrastructure at a much lower cost.
The USMCA Review in July 2026: A Diplomatic Crossroads
This internal fragility is multiplied by the approaching USMCA review, whose renegotiation clause will be triggered in July of the coming year. Moody’s has already sounded the alarm in this regard: the mere expectation of this renegotiation is already freezing long-term investment decisions. The pressure from Washington to tighten the rules of origin, currently at 75% Regional Value Content (RVC), opens a window to the dismantling of supply chains that rely on Asian inputs.
The automotive industry, the sector most exposed to nearshoring, fears that the origin of steel, aluminum, and software will be unprecedentedly scrutinized. This could indirectly raise entry barriers and force out plants that do not have the capacity to replace Chinese suppliers in record time. If the rules are tightened without adequate transition periods, plants in Mexico could see the benefits of the tariff rate quotas canceled, falling into a situation less favorable than that of facilities located in the United States.
A specific risk is precisely the offense against the triangulation of Chinese capital. The offensive from Washington to strengthen the rules of origin also seeks to end Mexico’s use as a “back door” for Asian goods. This places Mexico in a very delicate diplomatic situation. Between the Chinese investments that Mexico has attracted with success and insistence in recent years, especially in electromobility and auto parts, and the North American preferential market, there is a border that cannot be crossed. If the rules are tightened, not only could Asian investments that operate in Mexico have to leave, but it is not certain that their replacement would come from U.S. or Canadian capital.
The Asian Challenge: Vietnam, the Silent Competitor
Global competition is not slowing down while Mexico is struggling with these diplomatic dilemmas. Vietnam and other Asian countries have gone on the offensive to capture the next relocation wave. The UNCTAD’s World Investment Report 2025 shows that Vietnam is among the top five destinations for greenfield (new) projects at the global level, positioning itself well above Mexico in the case of high-tech projects relative to the size of their economies. The Harvard Growth Lab highlights in its analysis that Vietnam is taking a larger share of the U.S. market by introducing new products, while Mexico grows primarily by increasing the volume of what it traditionally exports. This qualitative difference indicates that the simple geographic advantage is being undermined by the greater productive sophistication and logistical efficiency of its Asian rivals.
Proximity to the United States—once an insurmountable advantage for Mexico—is ceasing to be so as the world logistics model is improving and value chains are increasingly operating on continental scales. If a company can manufacture in Vietnam and ship to California in a similar timeframe to Mexico, why pay higher wages and labor standards to be in a neighboring country? The traditional answer has been the USMCA, precisely the agreement that is under review.
The Mexican government’s response has been inertial so far. By trusting the gravitational force of economic integration itself, it hopes to avoid any rupture. This passivity, however, ignores the political climate shift in Washington, where industrial protectionism has become bipartisan state policy. The absence of a proactive lobbying strategy and of market diversification leaves Mexico at the mercy of the U.S. electoral cycle.
The Structural Dilemma: Reform Fiscal Policy or Accept Relative Stagnation
Mexico is at a historic crossroads as it begins to tackle the challenges of the next economic cycle. Continuing the current policy formula of unconditional tax incentives and wage compression will maintain the country in a situation of unstable equilibrium. Specialization in low–value–added manufacturing will continue to accumulate public liabilities while private profits are repatriated.
The alternative, however, is one that requires structural changes in tax policy that go far beyond inertial collection. Mexico must advance in the implementation of the OECD’s Pillar Two, a global standard that sets a minimum corporate tax rate of 15% to capture a fairer share of the income generated by Mexican nearshoring. Without this measure, the base erosion that currently allows large corporations to shift their profits to low-tax jurisdictions would persist. As the Mexican Institute of Public Accountants warns in its analysis of nearshoring challenges, the main obstacle to converting this investment into long-term sustainable development is the lack of a state policy that articulates efficient incentives with legal certainty and fiscal strength.
At the same time, unconditional tax incentives must be replaced by a selective industrial policy. Foreign investment incentives should not be automatic transfers but tied to verifiable goals, such as technology transfer, national value-chain integration, or environmental compliance. This is not protectionism; it is a more efficient use of scarce public capital in a country like Mexico that has urgent budget needs in strategic areas such as infrastructure, education, and the energy transition. Without additional resources and clear requirements on corporate behavior, fiscal space to fund these strategic areas will remain insufficient.
Without these reforms, nearshoring will be a cyclical phenomenon, subject to fluctuations in the international trade policy cycle. The review of the USMCA in July 2026 and Vietnam’s fast growth in greenfield projects are exerting long-term structural pressures that an economy with debt at 52% of GDP and low public investment (2.3% of GDP) will not be able to assimilate. The IMF’s projected growth of just 1.0% for 2025 offers no room for maneuver in the face of these simultaneous challenges. In the end, the destiny of Mexican nearshoring will depend on whether it can align the quality of investment with fiscal resilience and long-term development goals.