China has made more investment in Mexico in the last 8 years than any other country. When US started sanctioning China, they probably didn’t expect them to move to Mexico and bring the manufacturing here. Makes me wonder if Mexico now will become the biggest manufacture of goods in the western hemisphere.
Germany manufacturing companies have also moved here and I suspect this trend will continue as more countries plant flags in Mexico.
Mexico is cheaper on transportation to western markets, and labor costs are lower than China… let alone the US, Canada and Europe. It has better demographics than most nations, with a large middle class that also is going to spend more as incomes rise here.
For those who think the Peso will go back to 20 for each USD, I don’t suspect that will happen again, the best you can hope for is maybe back to 18.50, and at 16.50 their could be more down side for the USD as the fundamentals for a strong Mexican economy continue.
The only wrench that can come in the Mexico growth and strong peso trend is if the US starts sanctioning Mexico, which Trump is talking about, or the US military enters Mexico to stop the cartel drug war. Both of these things are being talked about, so I am not ruling them out… but until this happens, Mexico will continue to benefit from FDI, near-shoring and the Peso could find solid footing here.
Sanctions never worked on China, nor did it work on Russia, so the US sanctioning Mexico will most likely back fire here as well. Share your thoughts below, do you think the US will start sanctioning Mexico in the future, and will it work?
The only wrench that can come in the Mexico growth and strong peso trend is if the US starts sanctioning Mexico, which Trump is talking about, or the US military enters Mexico to stop the cartel drug war. Both of these things are being talked about, so I am not ruling them out… but until this happens, Mexico will continue to benefit from FDI, near-shoring and the Peso could find solid footing here.
Sanctions never worked on China, nor did it work on Russia, so the US sanctioning Mexico will most likely back fire here as well. Share your thoughts below, do you think the US will start sanctioning Mexico in the future, and will it work?