US Tariffs Could Halt US$61 Billion in Mexican Tech Investment

The tariffs implemented by the US government, which include levies of up to 25% on Mexican imports, are expected to halt projected technology investments of more than US$61 billion in Mexico. Companies such as Nvidia, Foxconn, and Amazon are reportedly re-evaluating their plans due to regulatory uncertainty.

"Mexico no longer has a reliable partner that will allow the country to attract new investments as expected with nearshoring, because President Trump's goal is to repatriate manufacturing. With the new measures, today the United States no longer needs us and I believe that is why nearshoring is dead," says Yamuni Robles, CEO, Megacable, to El Financiero.

At the end of 2022, Mexico positioned itself as a key destination for the relocation of Asian companies, mainly taking advantage of its proximity to the United States and the USMCA. Between January and September 2022, about 4 million square feet of industrial buildings were leased to install a plant or production lines in Monterrey, Saltillo, Mexico City, Tijuana, Ciudad Juarez, and Queretaro. Also, from February 2023 to July 2024, 231 investment projects were announced in sectors such as semiconductors, electronics, and automotive. However, the tariffs introduced in 2024 generated uncertainty regarding preferential access to the US market, Mexico's main competitive advantage.

According to Canieti's data, 68% of the announced investments corresponded to global technology companies, with a focus on resilient supply chains, reports El Financiero. However, the lack of clarity in trade rules has led to 40% of these projects being paused or re-evaluated.

Tariffs Sectoral Impact 

In the semiconductor sector, the uncertainty generated by the 25% tariffs has caused a delay in previously announced investments. Alejandro Nava-Alcantara, CEO, Enertronics, says that Mexico continues to play a critical role in the global semiconductor value chain, particularly in the assembly, test, and packaging (ATP) stages. However, he adds that project lead times have been significantly extended due to a lack of clarity in the commercial landscape.

"The United States’ dependence on Mexico and Asia for semiconductor supply persists, but investors are taking a more cautious stance," says Nava-Alcantara.

Meanwhile, flagship projects in advanced manufacturing such as Foxconn's plants in Nuevo Leon and Samsung's Jalisco facility are undergoing extensive feasibility reviews. These analyses seek to determine whether the additional costs derived from the tariffs can be absorbed without affecting the profitability of the operations. According to sources close to these companies, some expansion plans could be scaled down or, in extreme cases, be relocated to other markets if business conditions do not improve.

The situation also raises serious questions about the future of the USMCA. Robles says that the renegotiation process scheduled for 2026 could result in significant structural changes to the agreement.

"The imposition of unilateral tariff barriers by the United States contradicts the spirit of regional integration that underlies the USMCA," says Robles. He adds that the most likely scenario would be that the agreement will not disappear completely, but undergoes a profound transformation that redefines the rules of origin and dispute settlement mechanisms.

This scenario has motivated some companies to explore alternative strategies to maintain their presence in the region. One of the most prominent is the dual sourcing model, which consists of using two suppliers for a given component, raw material, product, or service, combining manufacturing operations in Mexico with smaller facilities in the United States.

This approach, according to Tech Target, would allow companies to meet regional content requirements while mitigating the impact of tariffs. In addition, dual sourcing can also boost a company's growth, as having more than one supplier ensures that the company can meet growing customer demand.

However, experts warn that this possible solution implies higher logistics and capital costs, which could affect competitiveness in the long term. In addition, there is a risk of inconsistent product quality.

Investment as a Catalyst for Innovation in Mexico

Mexico has historically demonstrated a remarkable creative capacity in sectors such as film, fashion, and design, ranking as the world's seventh largest exporter of creative goods according to the United Nations Conference on Trade and Development (UNCTAD). However, this creativity has not translated into sustainable technological innovation. The main obstacle, according to the Global Innovation Index 2024, is the chronic lack of investment in R&D, which represents just 0.3% of GDP, far below the global average of 1.7%.

Víctor Moctezuma, Founder, iLab, explains to Merca 2.0 that the real challenge does not lie in generating ideas, but in developing the institutional and entrepreneurial capacity to turn them into scalable solutions. "Mexico produces world-class talent, but lacks the innovation ecosystems to capitalize on it," he adds. 

To close this gap, Moctezuma points out that concrete actions are required on three main fronts. The first is to strengthen the link between academia and industry to ensure that research responds to the needs of the productive sector. The second would be a reform of educational programs to foster critical skills such as computational thinking and complex problem solving. Finally, there is a need to promote female participation in technology sectors, as only 37% of high-impact ventures are led by women.