Mexico spent years positioning itself as one of the biggest winners from North America’s push to shorten supply chains. Now, uncertainty over the trade agreement that helped power that expansion is beginning to influence where companies put their next dollar.
Executives at three auto-parts companies based in Aguascalientes are considering leaving Mexico and relocating operations to Vietnam, according to Reuters. No final departures have been announced, and the companies were not identified because the executives were discussing internal plans. Still, the deliberations offer a revealing look at how CUSMA uncertainty is moving from government negotiating rooms into factory investment decisions. Mexico continues attracting billions of dollars in foreign capital, but beneath the headline numbers, investment in entirely new operations has weakened sharply.
Three Suppliers Are Looking Beyond Mexico
The most striking warning comes from Aguascalientes, one of Mexico’s established automotive manufacturing centres. Executives at three auto-parts businesses there told Reuters that they were considering leaving Mexico and relocating to Vietnam. Their identities were withheld, meaning this should not be treated as three confirmed plant closures. What matters is that companies already embedded in a major North American manufacturing cluster are spending time and money studying an exit. Two executives at other multinational companies also told Reuters they had moved projects into a wait-and-see phase while the future of CUSMA becomes clearer.
Aguascalientes has plenty at stake. The state promotes itself as part of a major automotive hub centred around Nissan and a dense supplier network, including roughly 35 Tier 1 plants supporting about 20,000 direct jobs. Investment has not stopped: a new K&S automotive-harness facility opened there in February 2026 after an investment of roughly US$31 million, creating more than 200 jobs. That contrast is important. Mexico is not experiencing a wholesale automotive exodus. Instead, companies appear increasingly divided between committing more capital and keeping their options open until North American trade rules look more predictable.
Mexico’s Record FDI Number Hides a Much Weaker Investment Pipeline
At first glance, Mexico’s foreign-investment figures hardly look alarming. The Economy Ministry reported US$34.97 billion in foreign direct investment during the first half of 2026, the highest first-half total on record and 2.1% above the comparable 2025 figure. Manufacturing attracted US$13.48 billion, accounting for 38.6% of the total. Those figures underline why Mexico remains such an important industrial base. Existing multinational businesses are clearly not abandoning the country en masse.
The composition of that investment tells a more complicated story. Reinvested earnings represented US$30.96 billion, or 88.5% of first-half FDI. Entirely new investment amounted to only US$2.73 billion, or 7.8%. UNCTAD has identified an even sharper change in announced greenfield projects, which normally involve new factories, infrastructure or production capacity. Their value in Mexico fell from roughly US$44 billion in 2024 to US$24 billion in 2025. In other words, established companies are still generating profits and keeping much of that money in Mexico, but the pipeline of fresh production commitments has become noticeably less robust.
CUSMA’s Annual Review Cycle Is Turning Certainty Into a Business Cost
The trade agreement itself has not disappeared. CUSMA remains legally in force through 2036. The problem for investors is what happens between now and then. At the July 1, 2026 joint review, Canada and Mexico supported extending the pact for another 16-year term, but the United States did not. Under CUSMA’s sunset mechanism, that means the three countries enter annual reviews until they agree on an extension or the agreement eventually reaches its 2036 expiration date. For factories designed around investment horizons measured in decades, annual uncertainty is difficult to ignore.
That issue is especially sensitive in autos. CUSMA raised North American regional-value requirements for passenger vehicles and light trucks to 75%, while imposing additional requirements on core parts, steel and aluminum. Suppliers have consequently built operations around an integrated continental manufacturing system. Moving production to Vietnam would sacrifice some of Mexico’s proximity and preferential North American position, but Vietnam has been developing its own component ecosystem around Korean, Japanese and other manufacturers. The danger for Mexico is therefore not necessarily a dramatic wave of factory departures. It is the quieter possibility that the next production line, expansion or supplier contract goes somewhere else. Once those investment decisions accumulate, uncertainty can reshape an industrial base long before a trade agreement formally expires.
