Mexico’s elevated commerce with the US has additionally come about partly by means of a second key facet of nearshoring within the nation: US corporations establishing Mexican amenities too, generally after relocating manufacturing from factories in Asia.
Maybe the standout announcement got here from Elon Musk final yr, when he unveiled plans for a brand new Tesla Gigafactory outdoors Monterrey. Nonetheless, the electrical automotive firm is but to interrupt floor on the $10bn plant.
And, whereas Tesla is seemingly nonetheless dedicated to the venture, it has slowed its plans amid issues over the worldwide economic system, and recent job cuts at the carmaker.
However relating to Chinese language funding, some urge warning over Mexico being drawn into the broader geopolitical battle between the US and China.
“The outdated wealthy man on the town, the US, is having issues with the brand new wealthy man on the town, China,” says Enrique Dussel of the Centre for China-Mexico Research on the Nationwide Autonomous College in Mexico. “And Mexico – beneath earlier administrations, and on this one – does not have a method vis-à-vis this new triangular relationship.”
With elections looming on each side of the US-Mexico border, there could also be new political issues forward. However whether or not it is Donald Trump or Joe Biden within the White Home over the following 4 years, few anticipate any enchancment in US-China relations.
Mr Dussel thinks nearshoring is best outlined by what he calls “security-shoring”, saying Washington has positioned nationwide safety issues above all different elements in its relationship with China. Mexico, he argues, have to be cautious of being caught within the center.
Amid this stress, Mr Dussel says: “Mexico is placing up a giant signal to China saying: ‘Welcome to Mexico!’. You do not want a PhD to know that this is not going to finish nicely for bilateral relations between the US and Mexico within the medium time period,” he provides.