Japan Reaffirms Commitment to Mexico Despite Stronger US Ties

The recent meeting between Donald Trump and Japan’s Prime Minister Sanae Takaichi does not mean Japan will reduce its investments in Mexico, clarified Japan’s Ambassador to Mexico, Kozo Honsei.

Honsei explained that Japan is in a favorable position due to its renewed partnership with the United States, a development that also benefits Mexico. “President Trump recently visited our country and announced new investment plans,” Honsei said during his participation in the 31st Mexican Foreign Trade Congress organized by the Mexican Business Council for Foreign Trade, Investment and Technology (COMCE).

He emphasized that despite the closer relationship between Tokyo and Washington, Japan does not plan to redirect its investments northward. The reason, he said, lies in the advantages of USMCA, which provides greater logistical and production benefits for companies operating from Mexican territory. “I do not think that (moving investment away from Mexico) will happen. Increased activity in the United States creates more business opportunities in Mexico within the USMCA framework,” the ambassador stated.

He also noted that Japanese technology companies are closely monitoring the ongoing review of the trade agreement, as its outcome could influence new investment projects. “For instance, local content requirements, whether they change or not, are key factors companies are evaluating,” Honsei explained.

Regarding the closure of Nissan’s plant in Morelos and the COMPAS Cooperation Manufacturing Plant in Aguascalientes, Honsei clarified that these are strategic business decisions rather than signs of declining Japanese interest in Mexico. “Nissan is facing global challenges, and its Mexican leadership is restructuring operations while concentrating production in Aguascalientes,” he said.

Japanese Investment on the Rise

Since the pandemic, Japanese capital has surged under former López Obrador’s administration. In 2019, Mexico received US$1.76 billion in Japanese investment, a 22% decline compared to the previous year. In 2020, amid the pandemic, FDI fell further to US$1.33 billion. However, in 2021, investments rebounded to US$1.45 billion, an 8.5% annual increase. The recovery accelerated in 2022, reaching US$2.21 billion, a 53% jump driven by reinvestments and manufacturing expansions. By 2023, FDI climbed to US$2.96 billion, up 34% year-over-year. Finally, in 2024, Japanese investment hit a record high of US$4.29 billion, a 44.7% increase.