AI and Trade Boost Mexico’s Prospects

Mexico has opportunities to expand its participation in North American supply chains, capitalize on the growth of artificial intelligence (AI), and attract new investment in manufacturing, energy, and infrastructure amid a global realignment of trade flows, Citi Research noted.

According to its report, Must C: LatAm Poised for Take-Off, Mexico is among the main beneficiaries of the reorganization of regional supply chains, given its growing share of U.S. imports and its established position as the United States’ leading trading partner.

Mexico’s competitive advantage lies in its manufacturing integration with the world’s largest economy and the preferential market access granted under the United States-Mexico-Canada Agreement (USMCA).

The opportunity extends beyond the technology industry. The report highlights that Mexican exports of central processing units (CPUs), driven by the expansion of artificial intelligence in the United States, have contributed significantly to the country’s growing share of U.S. imports.

Mexico’s role in this supply chain involves assembling products during the final stages of production. Key components are imported from Taiwan and other Asian economies before the finished products are exported to the United States. These developments provide an additional opportunity to capitalize on the restructuring of global trade, as companies seek to diversify their suppliers and strengthen their production networks.

Despite these opportunities, Citi warned that uncertainty surrounding the USMCA review will continue to constrain some of the country’s investment potential. The bank has identified a significant pipeline of projects awaiting greater clarity on trade rules, regulatory frameworks, and the legal environment before moving forward.