Plan Mexico, a navigation chart for a new era

Even with the prevailing adverse global context, Mexico has an opportunity to gain market share in the United States, which in turn could help attract productive investment. This is the view of Mexican authorities and some global banking strategists.

Among all the countries around the world that have been subject to reciprocal tariffs imposed by US President Donald Trump, two stand out as competitors for Mexico in the relocation of manufacturing companies: Indonesia and Vietnam. The price these Asian countries must pay if they want to continue selling their products to the United States is a tariff of 32% and 41%, respectively.

The geographic proximity to the United States, which reduces transportation times for goods and products, as well as the competitiveness of the Mexican workforce, are factors that will continue to distinguish Mexico from other countries, they said.

Luis Gonzali, vice president and co-director of investments at Franklin Templeton, believes Mexico can gain some of the market share vacated by its main competitors in the United States.

It's true that Mexican exports, such as those in the automotive sector, aluminum, and steel, are also subject to some tariffs. But the United States government has applied exemptions for goods that operate under USMCA rules .

It is within this window of opportunity that the Mexican government's response to what is now recognized as the "trade war against the world" being implemented by U.S. President Donald Trump falls into the so-called Reinforced Mexico Plan, which aims to accelerate the domestic market.

Mexico continues to stand out due to its geographic proximity , which lowers the costs of logistics and transporting products and merchandise to the United States, as well as its specialized and competitively priced labor force, experts noted.

Plan Mexico is the industrial development strategy the government intends to implement to "quickly accelerate" investments in roads, trains, airports, and other public works to create between 500,000 and one million jobs.

A strategy that the government estimates could increase investment by 15 percentage points of GDP between now and 2030.

From roadmap to execution

At the presentation of the Plan, Secretary of the Economy Marcelo Ebrard stated that it is like a "navigation chart" that will be used from now on to incentivize the national productive sector, create jobs, and attract large investments.

Economists at the Institute of International Finance (IIF), the largest association of global financial institutions, believe the Plan reflects a key intention to collaborate with the private sector to strengthen economic resilience.

In the document containing the conclusions of the IIF expert visit, they clarified that "in the long term, incentives prevail for both economies to remain integrated."

Although they acknowledged that "enthusiasm for relocating companies seeking to bring their supply chains closer to the United States has waned in the face of tariff pressure."

BNP Paribas' Mexico economist, Pamela Díaz Loubet, added that the relocation of investments to Mexico remains on hold due to the prevailing external and internal uncertainty.

The complete redefinition of the rules of the trade game, and the fact that it's unclear whether it will be temporary, is keeping investments on hold, he noted.

Data from the consulting firm RCPH Servicios shows that between January 2023 and March 2025, 365 investment announcements totaling $81.268 billion were recorded.

Of these, only 19 investment announcements were submitted between January and March of this year, a significant drop compared to the pace of the previous two years.

Strategy: Remove the pause

With the Anthropology Museum serving as a backdrop for the relaunch of the reinforced Plan México , the president announced that on May 5th she will publish a decree providing support for expanding domestic manufacturing in the steel and aluminum industry, and on May 16th for the automotive industry.

Pending the details of these decrees, Luis Felipe Alcántara Pozos, director of public policy at the consulting firm RCPH Servicios, believes these are subsidies that will allow industries to navigate the crisis, which he believes will be positive.

It also plans to reduce red tape, boost access to financing plans for 30% of micro, small, and medium-sized businesses, train 150,000 professionals, promote science and technology, and leverage clean energy for community impact.

Barclays' chief economist for Latin America, Gabriel Casillas, said that " Plan Mexico is well designed, but it lacks implementation. It may be a good set of tools, but it will be important to align incentives in Mexico for it to fully take hold."

The objectives of Plan Mexico 2.0 are: to encourage a $100 billion increase in foreign direct investment per year by 2030; to create 1.5 million additional jobs in specialized and strategic manufacturing sectors; and to ensure that 50% of national supplies and consumption are made in Mexico in sectors such as textiles, footwear, real estate, and toys.

Internal areas of opportunity

According to Ana Lilia Moreno, program coordinator at México Evalúa, "we have a window of opportunity to become a manufacturing and logistics hub, but we need to fine-tune the internal conditions to facilitate this attraction."

IIF experts emphasized that the domestic context of judicial reform and the prevailing deficiencies in electricity, water supply, logistics, and public security infrastructure also do not help attract investment to the country.

One of the areas that all the analysts consulted identify as areas of opportunity to strengthen Mexico's attractiveness is in the regulatory framework, infrastructure, energy supply, physical security, among others.

"Investors have never trusted Mexico's legal framework. The important thing about trade agreements is that they become a legal framework that is enforced, geared toward business," Gabriel Casillas, Barclays' chief economist for Latin America, emphasized separately from Wall Street.

Launched in January 2025, Plan Mexico aims to boost North American integration, reduce dependence on Asian imports, and attract foreign investment through tax incentives and workforce training benefits.

No one gains anything by not having free trade, and no nation is better off than another, not even with the differential treatment the United States is giving Mexico and Canada, Díaz Loubet concluded.

Regarding the infrastructure plan running parallel to Plan Mexico, the president of the Business Coordinating Council (CCE), Francisco Cervantes, expressed confidence that it will boost investment and employment once the productive chains are activated. From his perspective, reinvestment will also be crucial in boosting Gross Domestic Product (GDP) growth to 2 percent.