Mexico’s FDI Hits Record US$40.8 Billion Amid Tariff Risks

Mexico closed 2025 with a record US$40.87 billion in foreign direct investment (FDI), up 10.8% year over year, reinforcing its position as a key nearshoring destination. However, rising US tariff volatility and trade policy uncertainty are creating a more complex outlook for 2026, especially for logistics, manufacturing, and export-driven sectors.

Mexico closed 2025 with a record US$40.87 billion in foreign direct investment (FDI), up 10.8% year over year, according to the Ministry of Economy. This marks the fifth consecutive year of growth and reinforces the country’s position as a strategic destination for productive capital. The announcement comes at a time when global trade conditions are becoming less predictable, with UNCTAD warning that shifting tariff regimes and legal uncertainty in the United States are redrawing competitiveness across global supply chains.

Mexico’s record FDI result suggests that investors continue to back the country’s manufacturing and logistics platform despite external turbulence, particularly around US trade policy. But the same forces that are driving nearshoring and capital relocation into Mexico are also creating a more volatile operating environment for exporters, logistics operators, and industrial planners in 2026.

According to the Ministry of Economy’s update, the composition of Mexico’s 2025 FDI highlights both resilience and a pending challenge. Reinvestment of earnings accounted for 67.7% of total flows, while new investments represented 18% and intercompany accounts 14.3%. Notably, new investments rose sharply to US$7.38 billion, a 132.9% increase from 2024, indicating renewed project execution beyond purely retained capital.

At the same time, the data also points to how concentrated Mexico’s investment profile remains. The United States contributed US$15.88 billion, or 38.8% of total FDI, far ahead of Spain (US$4.43 billion), Canada (US$3.32 billion), the Netherlands (US$2.39 billion), and Japan (US$2.29 billion). These five countries together accounted for 69.1% of total inflows.

Geographically, FDI remained heavily concentrated in a few states. Mexico City captured US$22.38 billion (54.8%), followed by Nuevo Leon with US$3.63 billion and the State of Mexico with US$3.28 billion. This concentration reflects where corporate headquarters, financial structures, industrial expansion, and major supply chain nodes are most active, but it also underscores the uneven regional spread of investment benefits.

Still, the headline record came with a warning sign. Mexico registered a negative FDI flow of US$5.026 billion in the fourth quarter, suggesting that year-end capital movements and dividend distributions disrupted momentum even as the full-year total remained at a record high, reports Expansion. In practical terms, this means Mexico’s long-term investment story remains strong, but quarterly volatility is becoming harder to ignore.

That volatility connects directly to the broader trade backdrop. UNCTAD’s February 2026 Global Trade Update warns that recent US tariff changes are creating a more restrictive and uneven trade landscape, with tariff shifts changing relative competitiveness among exporters and encouraging trade diversion. UNCTAD notes that developed economies appear less affected on average by recent US tariff changes, while developing and least developed economies face a widening relative disadvantage, MBN reports.

On one hand, tariff realignments and supplier diversification can support Mexico’s role as a nearshoring hub, especially for manufacturers seeking geographic proximity to the US market and integrated North American logistics. On the other, Mexico remains deeply exposed to US policy swings because of its trade dependence and the large share of US-origin investment flowing into the country. If tariff rules, exemptions or legal bases change repeatedly, companies may delay expansion decisions, adjust sourcing strategies, or prioritize shorter-cycle investments over large-scale commitments.

The uncertainty has intensified after the US Supreme Court struck down a broad set of tariffs, followed by a new temporary tariff approach announced under a different legal authority. US President Donald Trump said he would raise a temporary tariff on US imports from all countries to 15% from 10%, using Section 122, after the ruling. That sequence has reinforced concerns that legal outcomes may not necessarily reduce trade friction in the near term, but instead shift it into new forms.