Borderlands Mexico: USMCA gives Mexico an edge as global trade barriers rise

Founded in 1932, BBVA México is the largest financial institution and bank in the country.

The bank tied much of the increase to massive spending by U.S. technology companies on artificial intelligence infrastructure and data centers.

Mexico’s real manufacturing exports, particularly higher-complexity products, are running above their long-term growth trend. Machinery, electrical equipment and vehicles — Chapters 84, 85 and 87 of the Harmonized System — now represent nearly three-quarters of the country’s manufacturing exports.

“Despite concerns over the recent shift in US trade policy away from free trade, Mexico is experiencing a new export boom,” BBVA economists said in a report released Tuesday.

The researchers said the expansion is being fueled by the AI capital expenditure cycle, escalating U.S.-China trade tensions and Mexico’s relatively favorable tariff position compared with other major U.S. trading partners.

The development could provide fresh evidence that nearshoring — the movement of manufacturing and supply chains closer to U.S. consumers — is evolving beyond the automotive, appliance and traditional maquiladora industries that have long defined cross-border trade.

Mexico gains ground as US supplier

Mexico’s biggest advantage remains geography combined with preferential access to the world’s largest consumer market.

Mexico and the U.S. have become each other’s largest trading partners, and roughly 16% of U.S. imports now come from Mexico, according to BBVA. Another analysis from the Economics Observatory puts Mexico’s share of U.S. imports at a record 17% in early 2026, more than double China’s 7.2%.

The Economics Observatory is a UK-based, ESRC-funded project that connects academic research and public policy to provide clear, reliable answers to major economic questions.

Mexico’s fastest-growing shipments to the U.S. include computers, phones and electronics, and the country overtook China in 2025 as the leading supplier of advanced technology products to the U.S., according to the Economics Observatory.

BBVA found that computer exports are highly correlated with U.S. private investment in information-processing equipment and spending by hyperscalers such as Microsoft, Alphabet, Meta and Amazon. 

BBVA said Mexico’s trade surplus in Chapter 84 is now entirely explained by computer exports, suggesting the country is developing a comparative advantage in the sector.

Electrical and electronics exports are growing as well. Chapter 85 includes televisions, phones, communications equipment, circuits and conductors — products that increasingly feed the AI and computer manufacturing supply chain.

The growth in electronics manufacturing in Mexico could have significant implications for cross-border trucking and logistics networks serving manufacturing centers such as Ciudad Juárez, Tijuana, Monterrey and Guadalajara as more high-value electronics and components move between Mexican factories and U.S. customers.

USMCA gives Mexico an increasingly valuable advantage

The export boom is unfolding as protectionism increases around the world, making Mexico’s access to the U.S. market potentially more valuable.

U.S. tariffs have risen to their highest levels since the 1960s, including higher duties on vehicles, steel, aluminum and other products. Mexico faces some of those measures, but USMCA keeps its overall effective tariff burden significantly below that of many competing manufacturing countries.

By the end of 2025, Mexico faced an effective U.S. tariff rate of less than 5%, compared with about 33% for China and an overall U.S. average of approximately 10%, according to the Economics Observatory. About 88% of Mexican goods already enter the U.S. duty-free under USMCA.

That differential could become one of Mexico’s most powerful nearshoring incentives.

For manufacturers deciding whether to supply U.S. customers from Asia, Europe or Mexico, proximity is no longer Mexico’s only advantage. Preferential tariff treatment can potentially alter the economics of where companies locate factories and suppliers.

However, USMCA itself has become a source of uncertainty.

The U.S. declined to extend the agreement through 2042 during this year’s joint review, beginning a process of annual reviews that could continue until the agreement’s scheduled expiration in 2036. The decision did not terminate USMCA or change its existing trade and investment rules.

That means the nearshoring equation increasingly depends on how companies assess the durability of North American trade rules.

SpaceX plans $16.8B semiconductor factory in Texas

SpaceX plans to invest more than $16.8 billion to build a massive semiconductor manufacturing facility in Grimes County, Texas, creating 3,000 jobs, according to a news release.

The first phase of the project, called Terafab, will be a vertically integrated semiconductor fabrication plant designed to consolidate SpaceX’s chip production under one roof. SpaceX received a $30 million Texas Enterprise Fund grant, and the project qualifies for incentives under the state’s Jobs, Energy, Technology and Innovation program.

The planned 100 million-square-foot facility will combine logic chip production, memory and advanced packaging, according to SpaceX. Jobs at the plant will include engineers, technicians and plant operators.

SpaceX (Nasdaq: SPCX) operates its Starbase headquarters and launch complex in South Texas and a Starlink manufacturing facility in Bastrop.

Taiwan-based AI firm to invest $450M in Ciudad Juárez

Taiwan-based Inventec, which manufactures servers, artificial intelligence products and electronics, recently announced a $450 million expansion in Ciudad Juárez that could create as many as 6,000 high-value jobs.

Chihuahua has become one of Mexico’s leading exporters of computer and AI equipment to the United States, according to the state government.

Founded in 1975, Inventec manufactures computers, telephones, notebooks, and servers and has developed a strong foundation for global success. The company has more than 30,000 employees operating in 9 countries worldwide.

Why it matters: Mexico’s technology-led export boom is strengthening its position as a preferred U.S. manufacturing platform, but the next phase of nearshoring will depend on whether record trade flows can trigger substantially more investment and North American supply-chain development.