North America’s manufacturing map is being redrawn, and Mexico is in the spotlight. Once overshadowed by China’s rise, Mexico is now emerging as the anchor of regional manufacturing, driving unprecedented demand for its industrial real estate. This shift stems from Mexico’s proximity to the U.S., its strong trade framework, and the mounting pressures reshaping China’s role in the global economy.

Why U.S.–China Tensions Benefit Mexico

For years, China’s rapid internal growth fueled its economy. That momentum has slowed, pushing China to depend more heavily on exports, including increasingly sophisticated goods, to sustain expansion. As Chinese products flood global markets, U.S. manufacturers have struggled to compete on cost and scale. The U.S. was not willing to tolerate this. The growing trade imbalance, coupled with concerns over unfair trade practices, has triggered tariffs and a broader separation of the world’s two largest economies.

The COVID-19 pandemic drove the point home, exposing the fragility of long, distant supply chains as critical goods ran short. What began as a tariff war has evolved into a broader structural decoupling, with Washington now working to realign production and bring supply chains closer to them. The U.S. has made it clear it will no longer tolerate dependence on China.

For Mexico, this rivalry is an opening. The U.S. cannot manufacture everything it consumes; it lacks the scale of blue-collar labor to do so. Each escalation in U.S.–China tensions makes Mexico’s industrial real estate more valuable, positioning the country as the trusted production hub of North America.

Why Companies Choose Mexico

Mexico’s two great advantages are its geography and its workforce. Proximity to the U.S. allows companies to deliver goods by truck in a single day, rather than wait weeks for shipments to cross the Pacific. Aligned time zones and cultural compatibility further strengthen its appeal.

At the same time, Mexico offers a technically skilled and cost-competitive labor force. For manufacturers balancing efficiency and quality, this combination of talent and location is hard to beat. These strengths are fueling the rapid growth of industrial hubs and turning Mexico into a natural choice for global companies.

United States–Mexico–Canada Agreement (USMCA)

In today’s uncertain trade environment, the USMCA remains a stabilizing force. The pact shields most Mexican exports to the U.S. from tariffs. Furthermore, a full USMCA review is scheduled for 2026 and we believe Washington will apply pressure during the process to further push Chinese goods and investment out of the regional picture, making the USMCA the cornerstone for North American trade. A successful outcome could unleash a surge in demand for Mexican industrial real estate, as firms lock in space under a reinforced trade framework.

Even modest shifts of U.S. demand away from China and into Mexico would represent a seismic expansion of Mexico’s manufacturing base—underscoring why industrial real estate is at the start of its growth story.

Industrial Real Estate Demand Will Rise

We have already seen the first signs of this surge in demand for industrial space in Mexico. Multinationals have begun securing warehouses, distribution hubs, and built-to-suit facilities, pushing developers to capacity in high-demand corridors like Monterrey, Tijuana, and the Bajío region. Yet these early moves we have seen are likely just the beginning, the full impact of supply chain realignment and U.S.–China decoupling is still ahead, suggesting that the strongest growth is yet to come.

A Structural Opportunity

Global supply chains are being restructured, and Mexico has moved to the center of North America’s manufacturing map. With its skilled workforce, strategic location, and the stability of USMCA, the country is ideally positioned to capture demand as the U.S. reduces reliance on China.

For investors, this is not a short-term or cyclical play but a structural opportunity. Handled wisely by Mexico, this moment could translate into a decade of growth for their industrial sector.