Why Mexico?

Southern Arizona and Mexico’s cultural connection dates back hundreds of years and extends well beyond the formation of current geopolitical borders. Cultivating economic partnerships based on that shared cultural connection benefits both Southern Arizona and Mexico.

In 2023, Mexico supplanted China to become the U.S.’s top trading partner for the first time in more than 20 years. While Mexico has long been Arizona’s number one trade partner, this shift at the national level has significant economic implications for Southern Arizona.

The COVID-19 pandemic quickly exposed the U.S. dependence on China and the fragile supply chains created over the last 20 years. In every aspect of our lives, Americans saw how quickly those supply chains broke down during the pandemic.

However, far more importantly, the pandemic exposed how the U.S. overreliance on China is a threat to national security. Everything from semiconductors, pharmaceuticals, critical minerals, and batteries – to name a few – is sourced from China. In some cases, China is the only country that sources the commodities that go into so many finished products. Companies realized quickly that the “low-cost and just-in-time” model for their supply chains could no longer be the single answer. They needed to diversify their manufacturing operations and find locations closer to the US with an already favorable trade relationship – like Mexico.

As Mexico’s manufacturing sector continues to grow, Mexico is the primary recipient of manufacturers’ efforts to “nearshore” their operations across a variety of industries. All indications are that this shift is just beginning. According to Mexico’s Ministry of the Economy, Mexico had a record-high foreign direct investment of $36B in 2023, citing Mexico’s economic stability, competitive advantages, and good business environment for the record investment. This was a 27 percent increase in FDI compared to 2022.

The trade relationship between the U.S. and Mexico has never been stronger.