Mexico in the Wrong Chain

Mexico is part of global value chains… but it does not control them. And in today’s economy, that difference means everything. The world no longer produces for efficiency. It now produces for survival. Geopolitical tensions, logistical disruptions, and economic security concerns have shattered the linear model that dominated for decades. Today, value chains no longer follow predictable routes: they are designed, negotiated, and defended.

In 2025, global trade surpassed $32 trillion, according to the World Trade Organization, but the key insight is not volume—it’s reconfiguration. More than 40% of multinational companies are redesigning their supply chains to reduce geopolitical risk exposure, according to McKinsey & Company. Efficiency is no longer the core driver. Today, resilience, proximity, and control define the rules.

“Nearshoring is not an opportunity. It’s a filter.”

Mexico holds a privileged position due to its integration with the United States and Canada under the USMCA. In 2025, the country attracted over $36 billion in foreign direct investment, growing nearly 12% annually, largely driven by industrial relocation. But there is an uncomfortable truth: investment is arriving faster than Mexico is prepared to capitalize on it.

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From Nearshoring to Friendshoring, The New Logic of Industrial Power

The concept of nearshoring no longer fully explains what’s happening. Today, the world is shifting toward friendshoring: producing among trusted allies. Proximity is no longer enough; countries must be reliable, predictable, and strategically aligned.

In this new landscape, countries like Vietnam have increased their share of global manufacturing through aggressive fiscal incentives, while South Korea is consolidating its leadership in semiconductors through coordinated industrial policy. Mexico, by contrast, still relies too heavily on geography.

“Geography is no longer an advantage. Strategy is.”

Today’s value chains function as networks. Every node—every city—competes to attract investment, talent, and capabilities. Monterrey is not just receiving capital; it is building integrated industrial ecosystems. Querétaro is not just assembling; it is developing specialized technical talent. Tijuana is not just exporting; it is aligning advanced manufacturing with cross-border logistics.

Investment does not go to countries. It goes to territories. The problem is that these success stories remain exceptions, not the rule. Much of Mexico still operates under an administrative, rather than strategic, logic.

Global Fragmentation, The Opportunity Mexico Could Lose

Globalization did not disappear. It fragmented. The rivalry between the United States and China has reshaped key sectors such as semiconductors, energy, and pharmaceuticals. The result is a productive reorganization where national security weighs as heavily as economic efficiency.

The World Bank estimates that this fragmentation could reduce global GDP by up to 5% over the next decade. But it is also creating new value pathways for countries that position themselves as strategic partners.

Mexico could be the biggest winner. Its location, trade network, and manufacturing capacity position it as a natural bridge between North America, Latin America, and potentially Europe and Asia. But this opportunity is not automatic.

“The problem is not a lack of opportunity. It’s a lack of strategy.”

Today, the greatest risk is not being excluded from global value chains. It is being trapped in their least profitable segments.

You can see this article here:

https://www.youtube.com/watch?v=nibDUYQr_3U

Governing in Networks, The New Standard of Competitiveness

Competitiveness is no longer measured by labor costs. It is measured by coordination capacity. Strategic value chains require governments capable of operating as connection nodes between industry, talent, infrastructure, and public policy.

In Europe, the European Commission is driving industrial autonomy strategies in critical sectors. In Asia, governments like Singapore and South Korea design full ecosystems to attract high-value investment. They do not improvise. They compete.

Mexico, by contrast, faces a structural challenge: fragmentation between levels of government. While the federal government negotiates trade agreements, many municipalities still do not understand how to integrate into them.

“Without territorial strategy, there is no competitive advantage.”

Local governments are the real entry point for investment. They define timelines, costs, infrastructure, and certainty. Without an aligned vision, Mexico risks becoming an uneven mosaic: highly competitive cities surrounded by disconnected territories. Governing today means competing globally.

Global value chains no longer reward passivity. They reward strategic intent. Mexico can no longer rely on location as a sufficient advantage. The new economy demands design, coordination, and territorial leadership.

Because in this new logic, those who do not create value… transfer it.

This is only the beginning of a transformation redefining the role of territories in the global economy. At interAlcaldes, we will continue exploring how Mexican cities can move from reacting to global change to shaping it.

Because in this new economy, those who do not design the chain… become subordinated to it. Does Mexico want to be part of the chain… or does it want to design it?

Written by: Editorial

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