Nearshoring investments still flowing south of the border

Borderlands Mexico is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week, we take a closer look at the continued flow of nearshoring investments south of the border, highlighting key developments in the manufacturing and logistics sectors.

Despite the current uncertainty in global trade relations, foreign direct investment (FDI) in Mexico 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 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 more than 40% of the country’s FDI.

Mexico continues to benefit from the global trend of nearshoring, as companies reconsider their dependence on manufacturing in Asia. Jordan Dewart, CEO of Redwood Mexico, noted that the nearshoring trend to Mexico is gaining momentum, with manufacturers increasingly moving their supply chain operations to the country. This shift represents a pivot among manufacturers who initially looked to Southeast Asia for alternatives but now view Mexico as a more viable long-term solution.

While nearshoring presents significant opportunities for Mexico, it also faces challenges such as security concerns, infrastructure needs, and trade policy uncertainty. Eric Baker, a transportation attorney at Frost Brown Todd, emphasized the impact of uncertainty on supply chain decisions, noting that disruptions like tariffs can significantly affect long-term investment strategies.

Jacob Shapiro, director of research at The Bespoke Group, highlighted the importance of building the necessary infrastructure to accommodate increased manufacturing activity in Mexico. He also expressed concerns about the trade confidence in North America and the United States-Mexico-Canada Agreement amid policy uncertainty.

Looking ahead, 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 from this shift over the coming decades. Dewart echoed this sentiment, expressing optimism about Mexico’s long-term prospects and its ability to navigate trade uncertainties.

In recent developments, Buhler Group announced the construction of a $24 million manufacturing plant in Torreón, Mexico, marking its first facility in the country. Frisa also launched a $350 million steel mill in Monterrey, expanding its steel production capacity for various industries. Additionally, NRS Logistics America Inc. opened the Chemical Logistic Park in Casa Grande, Arizona, catering to semiconductor and electric vehicle manufacturers.

The influx of nearshoring investments in Mexico underscores the country’s growing appeal as a manufacturing hub, despite challenges and uncertainties. As companies continue to reevaluate their supply chain strategies, Mexico remains a key player in the evolving landscape of cross-border trade and investment.

This post was originally published on FreightWaves and can be accessed for more information on the latest developments in the United States-Mexico cross-border trade.