Mexico’s economy is standing at a crucial crossroads. On one hand, global nearshoring trends and the upcoming renewal of the United States-Mexico-Canada Agreement (USMCA/T-MEC) provide a historic opportunity for growth. On the other, rising trade uncertainty with the United States could weigh heavily on both economic performance and Mexico’s sovereign credit rating.

The world’s top three rating agencies — Fitch Ratings, Moody’s, and Standard & Poor’s (S&P) — agree that nearshoring and the fate of the USMCA will be decisive in determining Mexico’s economic trajectory and long-term credit stability.

Credit Agencies: A Unified Perspective

The three largest global credit rating agencies have issued similar assessments:

• Nearshoring in Mexico represents a strong medium-term growth opportunity.
• The renewal of the USMCA is a crucial condition for sustaining these benefits.

Trade tensions with the United States present material downside risks.

Fitch: Opportunities With Conditions

At Fitch’s annual “Fitch on Mexico” conference, Shelly Shetty, Head of Sovereign Ratings for Latin America, underscored that nearshoring remains one of Mexico’s greatest opportunities. However, its potential is closely tied to the outcome of the USMCA renegotiation.

Shetty pointed to Mexico’s unique competitive advantages: proximity to the United States, a strong manufacturing base, and integration within North American supply chains.

Despite these strengths, Fitch maintains Mexico’s sovereign rating at BBB- with a stable outlook — the lowest level of investment grade. The rating reflects optimism about nearshoring but also caution about risks related to governance, security, and external trade policy.

Moody’s: Risks From U.S. Trade Policy

Moody’s takes a slightly more cautious stance. Sovereign analyst Renzo Merino highlighted in a recent podcast that U.S. trade policy uncertainty poses a real risk to Mexico’s growth outlook beyond the next year.

“These external risk factors are central to what could lead to a potential downgrade scenario,” Merino warned.

Currently, Moody’s rates Mexico at Baa2 with a negative outlook, placing the country just two notches above speculative grade. This reflects concerns that ongoing trade disputes and tariff battles could undermine Mexico’s ability to capitalize on nearshoring momentum.

S&P: Nearshoring as a Growth Engine

S&P Global Ratings shares the view that nearshoring could become a positive growth engine for Mexico. Joydeep Mukherji, Head of Sovereign Ratings for Latin America, noted that relocating production to Mexico has the potential to boost economic performance and support future upgrades in credit ratings.

Still, S&P cautions that the long-term outcome depends on Mexico’s ability to foster a stable investment climate, including legal certainty, infrastructure, and security conditions.

Nearshoring in Mexico: The Growth Opportunity

The nearshoring trend — multinational companies relocating production closer to the U.S. market — has already started to reshape Mexico’s industrial landscape. In 2025, exports represented 36% of Mexico’s GDP, reflecting the central role of trade in economic activity.

Nearshoring strengthens Mexico’s position in key industries such as automotive, electronics, aerospace, and consumer goods. By reducing supply chain vulnerabilities and lowering logistics costs, companies see Mexico as a natural hub for North American production.

For rating agencies, this trend could translate into higher growth potential, stronger fiscal revenues, and greater macroeconomic stability — if managed effectively.

USMCA Renewal: The Decisive Factor

While nearshoring brings opportunities, its success depends heavily on the renewal of the USMCA (T-MEC). The agreement underpins Mexico’s trade relationship with its two largest partners, the United States and Canada, accounting for nearly 80% of Mexican exports.

Any uncertainty about the agreement’s continuity could discourage both foreign direct investment and domestic investment in Mexico. This is why rating agencies emphasize that the USMCA renegotiation outcome will directly influence Mexico’s sovereign credit profile.

If successfully renewed, the agreement would provide the legal and institutional certainty investors seek. If tensions escalate, Mexico risks losing ground in the global race for nearshoring capital.

Trade Risks: Tariffs and U.S. Policy Shifts

The biggest challenge comes from external shocks, particularly U.S. tariff policies. In recent years, tariffs have increasingly been used as leverage in trade disputes, raising uncertainty for Mexico’s exporters and investors.

UNAM researcher Clemente Ruíz Durán described this dynamic as “a senseless trade war,” where tariffs are deployed not as tools for fair trade but as bargaining chips for political or economic concessions.

Such measures could erode the very benefits of nearshoring, forcing companies to rethink investment plans and limiting Mexico’s growth prospects.

Mexico’s Sovereign Ratings: Current Standing

Fitch Ratings: BBB- / Stable outlook

Moody’s: Baa2 / Negative outlook

S&P Global: BBB / Stable outlook

Together, these ratings place Mexico at the lower end of investment grade. The country is just a few notches away from speculative territory — a position that underscores both the opportunities of nearshoring and the risks of trade-related uncertainty.

What Mexico Must Do to Strengthen Its Position

While global factors are outside Mexico’s direct control, policymakers can take steps to improve the country’s credit profile and maximize the benefits of nearshoring. Key priorities include:

1. Secure the Renewal of the USMCA

Ensuring continuity and modernization of the trade agreement is critical to maintaining investor confidence.

2. Invest in Infrastructure

Improving logistics, transportation, and industrial capacity will allow Mexico to fully leverage nearshoring demand.

3. Address Security Concerns

Persistent challenges in security in Mexico continue to affect both domestic and foreign investor sentiment. Reducing crime and ensuring protection for businesses are essential.

4. Strengthen Governance and Rule of Law

Predictable regulations, judicial transparency, and respect for institutional autonomy will encourage more investment and support credit stability.

Conclusion: Opportunity Meets Risk

The message from the world’s leading rating agencies is clear: Mexico has a unique opportunity to transform its economy through nearshoring and the renewal of the USMCA. Together, these factors could improve growth prospects and eventually strengthen the country’s sovereign credit rating.

At the same time, Mexico faces significant risks from trade uncertainty, tariff disputes, and domestic challenges. Successfully navigating this balance will determine whether Mexico consolidates its position as a nearshoring leader — or remains vulnerable to external shocks.