Mexico is poised to become a leading nearshoring and manufacturing hub as global supply chain realigns from tariff upheaval.
Industry expert Javier Mr. Nearshoring® Zarazua highlights Mexico’s industrial growth and favorable political changes under the new administration as reasons why Mexico is a chosen industrial location.
We have resources, we have manpower, and we still have a large percentage of our workforce in Mexico employed in the informal economy. We can transform those into manufacturing jobs. It’s a win-win for everybody.
Global supply chains continue to realign in the face of a global trade war and tariff upheaval. Mexico stands at a turning point that could transform its economic future, should the country capture opportunities as a choice nearshoring location and manufacturing leader.
According to industry expert Javier Mr. Nearshoring® Zarazua, Managing Partner at JL Nearshoring Mexico, Mexico is already gaining momentum in the manufacturing space and stands to gain significant ground as a leading manufacturer in the coming years.
Transformative opportunity: “I’m convinced that nearshoring is the biggest opportunity that Mexico has to really get to the next level,” says Zarazua. “The transformation that has already happened in Mexico in the last few years has been tremendous.”
The evidence is unmistakable: industrial real estate in Mexico that was plentiful three years ago has completely vanished, with previously available buildings now fully occupied across manufacturing regions. Cities like León, Guanajuato, that were once limited to traditional industries, have undergone remarkable development in just a decade. The pace of growth has outstripped infrastructure, with new industrial parks facing power shortages. In Saltillo alone, dozens of new industrial buildings have appeared in three years, and undeveloped land is rapidly being converted for manufacturing use. “It’s just unbelievable,” Zarazua observes.
Mexico’s new administration: This optimism comes amid significant political changes in Mexico that appear favorable to manufacturing growth. According to Zarazua, Mexico’s new administration is taking a more business-friendly approach than its predecessor.
“Claudia Sheinbaum is a lot more pragmatic and she’s investing heavily in infrastructure,” he notes. “She’s already announced expansions to ports, highways, roads, rail, and reinvestment. She also just opened up investment for energy to private capital.”
These policy shifts represent a departure from previous administrations and signal a commitment to economic development through manufacturing. “Her policy is ‘shared prosperity’ and she wants to use manufacturing as a lever to achieve that, which I think is the right approach,” Zarazua explains. “Manufacturing has been a progress lever for the world since the industrial revolution. It was for China too—they used manufacturing as the lever to be where they are today.”
Manufacturing has been a progress lever for the world since the industrial revolution. It was for China too—they used manufacturing as the lever to be where they are today.
Supply chain challenges: Despite the optimism, Zarazua identifies significant hurdles that must be overcome for Mexico to capitalize fully on nearshoring opportunities.
“The biggest challenge we have in Mexico is developing supply chains,” he emphasizes. Drawing from his experience quoting projects for U.S. customers through Mexican suppliers, he points to a stark reality: “I have quoted innumerable projects through the supply base in Mexico. Every single time when suppliers quote textiles made in Mexico, we are at least twice the price.”
The root cause, according to Zarazua, is Mexico’s underdeveloped domestic supply ecosystem compared to competitors like China. “We don’t have the supply chain that China has. China has almost every industry fully integrated within the country,” he explains. “If it’s cars, you can find metal, you can buy plastic, you can find seats—and it’s all made in China. For textiles, you find the mills, the warehouses, everything. The entire supply chain is developed.”
Strategic investments needed: To address these gaps, Zarazua advocates for a targeted approach to developing key industries. “If I were the president, I would offer heavy incentives,” he suggests. “Just like Trump is focusing on the semiconductor industry, I would focus on moving the textile industry to Mexico. Either you move your facilities to Mexico, or face heavy tariffs.”
He emphasizes the strategic importance of certain sectors: “Industry reinforcement is critical, particularly the metal industry. Automotive represents 20% of Mexico’s GDP.” Breaking down the components of automotive manufacturing, he notes, “What does a car have? Metal, plastic, and textiles. We need to develop those supply chains in Mexico and strengthen the entire manufacturing ecosystem.”
Workforce advantages: While supply chains present challenges, Mexico’s workforce offers distinct advantages, according to Zarazua. “There’s an aversion among the U.S. population to work in manufacturing, unlike in Mexico,” he observes.
The demographic differences are striking: “In Mexico, you go to manufacturing plants and see a bunch of 18-year-olds. You go to a manufacturing plant in the United States, and you see workers who are 50, 60 years old. The difference is unbelievable.”
A younger workforce represents a key competitive advantage and significant social opportunity. “We have resources, we have manpower, and we still have a large percentage of our workforce in Mexico employed in the informal economy,” notes Zarazua. “We can transform those into manufacturing jobs. Those people not only make very little money in the informal sector, they don’t have any benefits. In a manufacturing facility, they will make more money and have full benefits. It’s a win-win for everybody.”
