During George W. Bush's presidency (2001–2008), the U.S. share of total FDI in Mexico declined at an annual rate of -8.2%. His administration faced the aftermath of the dot-com bubble burst (2000–2002), the economic shocks of 9/11, and, by the end of his term, the 2008 financial crisis, which led to a global investment downturn.

Under Barack Obama (2009–2016), the decline slowed (-2.8% annually). The U.S. economic recovery—driven by stimulus plans and a revived manufacturing sector—helped prevent a steeper contraction, though NAFTA renegotiation talks in 2016 introduced uncertainty.

Donald Trump's protectionist policies (2017–2020) exacerbated the trend, with U.S. FDI in Mexico falling by -6.4% annually. His anti-Mexico rhetoric, constant tariff threats, and a forced NAFTA renegotiation increased investment volatility, though Mexico remained a key destination.

Under Joe Biden (2021–2024), U.S. FDI in Mexico grew by 0.2% annually—the first recovery in over two decades. Nearshoring, the stabilization of the USMCA, and a more predictable trade policy reassured investors, though inflation and pandemic-related disruptions tempered stronger growth.

While total FDI has been more stable under Democrats, new investments have shown sharper contrasts.

During the Bush administration, new U.S. investments in Mexico declined at -9.5% annually. Under Obama, the trend reversed, with new FDI growing by 2.1% annually. Trump's trade policies triggered another decline (-6.2% annually), while under Biden (2021–2024), new U.S. investments surged by 16.5% annually—the most significant increase in 25 years.

However, the nature of investment has shifted. Unlike previous cycles, where growth was primarily driven by new companies entering the market, the latest expansion has been fueled by reinvestment from firms already established in Mexico.

A SiiLA REsource analysis of Mexico's industrial real estate market reveals that while the arrival of new foreign companies slowed after 2021, the expansion of existing firms sustained overall growth. Over the past four years, foreign firms have absorbed nearly 13 million square meters of industrial space in Mexico, with U.S. companies leading the trend.

This phenomenon partly explains Biden's FDI growth. While new company arrivals dropped 31% from the nearshoring peak in 2021, reinvestment by established firms doubled in the same period. In fact, although new foreign investments fell by 67% between 2021 and 2023, total FDI continued to grow by 7–8%, reflecting a shift in investment strategies.

While investment has followed cycles of stability and transformation, trade has responded to different dynamics—where Republican administrations have had a more pronounced impact on Mexico's trade surplus.

During George W. Bush's presidency (2001–2008), Mexico's trade surplus with the U.S. grew at a compound annual rate of 11.6%. NAFTA's expansion and Mexico's manufacturing boom boosted exports, while U.S. consumer demand kept Mexican products in high demand.

Under Obama (2009–2016), trade surplus growth slowed to 4.1% annually as the 2008 financial crisis and global recession weakened demand for manufactured goods, reducing trade growth.

However, under Donald Trump (2017–2020), Mexico's trade balance took an unexpected turn: the surplus grew by 17.1% annually—the fastest rate on record at the time. His tariff threats and protectionist rhetoric failed to reduce the U.S. trade deficit; instead, many companies strengthened their production chains in Mexico to avoid additional costs.

Under Joe Biden (2021–2024), this trend continued. Mexico's trade surplus grew by 17.7% annually, reaching an all-time high in 2023. The stability of the USMCA and supply chain reconfigurations cemented Mexico's position as the U.S.'s top trading partner—overtaking even China and marking a turning point in bilateral trade relations.

With the USMCA set for renegotiation in 2026 and a new Republican administration likely to take office, the U.S.-Mexico trade relationship is entering another period of adjustments and uncertainty. But if the past decades have shown anything, it's that politics can shift, but economic forces follow their own logic.

Washington may change its rhetoric, but reality has always been stronger than the debate over walls and bridges. And in this game, governments come and go, treaties are rewritten, and crises rise and fall—but money always finds its way.

The real question is: Who will capitalize on it this time?

For more insights on investment trends, economic performance, and industrial real estate, visit SiiLA REsource or contact us at contacto@siila.com.mx.