Puebla Investment Plunges 61% in 1H25 Amid US Auto Tariffs

Puebla experienced a 61% decline in investments during the first half of 2025, largely driven by US tariffs affecting the automotive industry, a cornerstone of the state’s economy. According to Carlos Sosa, president, National Chamber of the Transformation Industry (CANACINTRA) in Puebla, the drop is linked to uncertainty among national and foreign investors.

“In the first semester of 2025, Puebla recorded a 62% fall in foreign direct investment compared to the same period in 2024. From January to June 2024, the state attracted US$1.295 billion, while in the same period of 2025 it fell to US$491 million,” Sosa said. Ministry of Economy data confirm these figures.

The tariffs have particularly impacted the automotive sector, which relies heavily on exports and international supply chains. Sosa noted that the levies have increased production costs and reduced the competitiveness of local plants.

Export figures reflect the broader economic impact. In 2Q25, Puebla’s exports fell 19%, from US$4.975 billion to US$4.047 billion compared with the same period in 2024. Despite the decline, Puebla remains Mexico’s 12th-largest exporting state, behind leaders such as Chihuahua.

Audi’s San Jose Chiapa plant, which produces the Q5 SUV, is among the most affected facilities. The vehicle faces a 27.5% tariff due to noncompliance with USMCA rules. “Given that many components are manufactured in Europe, mainly Germany and Hungary, Audi is reconsidering its strategy of concentrating global Q5 production in Puebla,” Sosa explained.

While investment and exports have dropped sharply, formal employment has remained relatively stable. Jobs registered with the Mexican Social Security Institute (IMSS) grew 0.5% in the first half of 2025. However, with 72% of Puebla’s workforce informal, the state remains vulnerable if investment declines persist.

In 2024, Puebla generated US$19.7 billion in exports, with 55.5% from vehicles and 12.8% from automotive parts and accessories. Both sectors are now facing higher US tariffs, compounding challenges for local manufacturers.