Despite the uncertainty surrounding the North American free trade agreement (T-MEC), Mexican businesses are showing resilience and optimism about their future prospects. The country’s maquiladoras, which temporarily import inputs to manufacture products for export, have a long history of adapting to economic ups and downs.
For Marco Antonio López, president of SMK Electrónica in Tijuana, the experience of Trump’s previous presidency was “very similar” to the current situation. López notes that the industry has learned to adapt, and that investment is so high that it will be difficult for it to disappear.
However, not all companies are sanguine about the future. An anonymous company in the automotive sector told AFP that trade growth in the region will be significantly reduced due to tariffs, leading to higher product prices and a loss of competitiveness.
The Mexican aerospace industry, which manufactures specialized components for Boeing and General Electric, is also vulnerable to price increases. Erik Palacios, director of the Monterrey aerospace cluster, notes that making a change of supplier in this sector is a complicated process.
Despite these concerns, companies consulted by AFP say their investment plans are long-term, beyond Trump’s four-year term. Marco Antonio López explains that decisions in his company are not made six months or a year in advance, but rather for five to ten years.
The German automaker BMW has also announced a significant investment of 800 million euros in Mexico to produce batteries and assembly of its new generation of electric vehicles starting in 2027. A company spokesman told AFP that long-term strategic decisions are not based on policies or political incentives.
Foreign direct investment in Mexico totaled $36.872 billion in 2024, indicating a strong commitment to the country’s economy. As one company executive noted, the development of a part for a turbine can take between two and three years. If tariffs are imposed and prices rise, it will be difficult for US companies to find a local supplier to replace a Mexican company.
In conclusion, Mexican businesses remain optimistic about their future prospects despite Trump’s trade threats. The maquilas have a long history of adapting to economic ups and downs, and investment is so high that it will be difficult for the industry to disappear. While some companies are concerned about the impact of tariffs, others are committed to long-term investments in Mexico.
Source: Barrons
