Executive Introduction: Nearshoring Is Paused, Not Reversed

Across North America, nearshoring momentum has slowed. Projects are being reassessed, timelines extended, and capital deployed more cautiously. Yet despite this pause, Mexico continues to be viewed by U.S. executives as a strategic partner, not a temporary solution.

Recent insights from U.S. CEOs interviewed by Kearney point to a nuanced reality: Mexico remains attractive under the USMCA framework, but growth is becoming more concentrated and execution risks more visible.

The message is not one of retreat, but of selectivity.

USMCA as the Structural Anchor

For U.S. companies, the United States–Mexico–Canada Agreement (USMCA) remains the central pillar supporting nearshoring decisions. Executives emphasize that preferential trade treatment is essential to unlocking the next wave of productive investment in Mexico.

According to Kearney’s nearshoring survey (1H 2025 data):

• 29% of surveyed executives have already made manufacturing investments in the past three years
• 28% have decided to relocate operations to Mexico or Canada
• 15% are actively evaluating nearshoring projects
• Only 7% report no nearshoring consideration

These figures suggest that interest remains broad—but conditional.

Why Growth Is Slowing Despite Strong Interest

While Mexico continues to be perceived as a vital U.S. partner, new investment has decelerated since 2024. Kearney’s analysis points to several structural constraints shaping this slowdown:

• Limited capacity in advanced manufacturing and electronics
• Infrastructure bottlenecks in logistics and border crossings
• Energy and water availability constraints
• Rising security and compliance costs

At the same time, lower-cost Asian manufacturing hubs—excluding China—have increased exports to the U.S., capturing demand that Mexico has struggled to absorb due to capability gaps.

Concentration Risk: Where Growth Is Still Happening

Nearshoring growth has become highly concentrated, both geographically and sectorally. Rather than broad-based expansion, companies are focusing on:

• Proven manufacturing corridors
• Established supplier ecosystems
• Locations with existing logistics and compliance infrastructure

This concentration reflects a shift from expansion-driven nearshoring to risk-managed nearshoring.

Labor and Policy Risks on the Radar

U.S. executives also highlight domestic policy risks that could affect Mexico’s competitiveness. Among them:

• Proposed reductions in working hours, which may increase labor costs
• Persistent security challenges
• Regulatory and permitting delays

These factors do not negate Mexico’s attractiveness, but they raise the threshold for new investment approvals.

Logistics: Capacity Is Reaching Its Limits

Logistics remains one of the most binding constraints.

Key data points cited by Kearney:

• Northbound road freight reached a record 57 million tons in 2024
• In 2025, stricter security and regulatory measures are slowing flows
• Driver shortages and new compliance rules add friction at the border

As logistics systems approach saturation, companies increasingly prioritize predictability over speed.

The Strategic View from U.S. Executives

During the presentation of Kearney’s analysis, Omar Trujillo emphasized that Mexico’s long-term attractiveness depends on maintaining preferential access under USMCA.

From a U.S. perspective, Mexico plays a dual role:

• Supporting U.S. reshoring objectives
• Providing cost-effective production capacity within North America

This alignment explains why executives continue to advocate for a preferential USMCA framework, even amid political uncertainty.

Technology and Capability Gaps

Another recurring theme in Kearney’s research is Mexico’s limited ability to supply advanced technology and electronics, compared to Asian competitors.

Countries such as India, Taiwan, Singapore, and Vietnam have increased their share of U.S. imports by offering:

• Specialized electronics manufacturing
• Higher automation density
• Faster scale-up of advanced processes

This gap highlights the need for Mexico to move beyond volume manufacturing toward capability-driven nearshoring.

What This Means for Nearshoring Decisions

The current phase of nearshoring favors companies that:

• Secure capacity early
• Digitalize logistics and operations
• Automate production and compliance processes

As Kearney warns, in an environment of driver shortages, utility constraints, and tariff volatility, execution capability becomes a competitive differentiator.

Outlook: Selective Acceleration, Not Retreat

Mexico remains a strategic partner for U.S. companies under the USMCA. However, the next phase of nearshoring will be:

• Slower
• More selective
• More concentrated

Investment decisions will increasingly depend on execution readiness, not just cost advantages.

Decision Takeaway

Nearshoring in Mexico is not over—it is evolving. U.S. CEOs continue to view Mexico as a vital partner, but expect greater clarity on trade rules, infrastructure capacity, and domestic reforms.

Under a stable USMCA framework, Mexico retains the potential to accelerate nearshoring again—provided structural constraints are addressed.

FAQ – Typical Search Questions

Is Mexico still attractive for nearshoring under USMCA?Yes, particularly for companies seeking North American integration.

Why has nearshoring slowed since 2024?Infrastructure limits, capability gaps, and trade uncertainty.

Are U.S. CEOs still investing in Mexico?Yes, but decisions are more selective and phased.

What sectors benefit most from nearshoring today?Manufacturing with established supplier ecosystems and logistics access.

What could accelerate investment again?Clarity on USMCA treatment and improvements in infrastructure and logistics.