Redwood MX Update: November 2025

This Month: U.S. Nearshoring Investments Are Declining

Welcome to the November edition of Redwood’s Mexico Market Update! This report looks at key economic and business trends in Mexico, transportation news, and investments in Mexico in November. We’ve created the Mexico Market Update to keep you informed about new developments that have the potential to affect your own cross-border results. 

After three years of strong investment in nearshoring, U.S. businesses are slightly cooling on the idea. According to consulting firm Kearney’s 2025 Reshoring Index, U.S. imports growth this year trailed the boom of 2023 and 2024.   

Although 25% of U.S. CEOs remain interested in relocating production to Mexico, the country faces structural challenges that limit its competitiveness. “Mexico’s infrastructure—particularly roads, energy, and water—remains a persistent challenge, with several states struggling to provide enough electricity,” says the report. “Its workforce remains competitive, but…labor costs increased by 4 percent annually, totaling a 14 percent increase since 2020.” 

Other challenges named by Kearney are tariffs, regulatory uncertainty, and long lags between investment announcements and operational capacity coming online. 

While investment may be declining from the high numbers of the past two years, the fact remains that cross-border trade holds huge potential for companies that know how to navigate tariffs, infrastructure issues, and other challenges. Our team of experts at Redwood Mexico stands ready to help. 

Looking at general economic trends, Mexico has seen stability over many months in both fuel prices ($5.417 USD/gallon) and the currency exchange rate ($18.3262 USD/MXN).  The Kearney report also cited rising incidents of cargo theft in Mexico as a concern for U.S. investors.  

Cargo theft in Mexico remained elevated in Q3 2025, with 86% of incidents occurring between Monday and Friday, and criminal activity peaking from Tuesday to Friday (accounting for 72% of all thefts). Most thefts (52%) took place at night between 6 p.m. and 6 a.m., while morning hours from 6 a.m. to 12 p.m. accounted for an additional 28% of cases. 82% of national incidents were concentrated in 10 states, with Puebla (23%) and the State of Mexico (18%) being the most affected, though both recorded slight decreases compared to Q3 2024. The most targeted product categories were food and beverages (25%), autos and parts (12%), and miscellaneous goods (10%).  

Transportation News and Challenges   

New 25% tariff severely impacts heavy-duty truck segment 
Beginning on November 1, U.S. President Donald Trump imposed a new 25% tariff on medium- and heavy-duty truck imports. But the negative effects began in October, when Mexico’s heavy-vehicle industry faced a significant downturn. Production and exports fell by more than 50% compared to October 2024. This decline also affected the domestic market, with wholesale sales dropping by around 61% and retail sales by nearly 45%. The main factor behind this decrease is Trump’s tariff policies, as more than 90% of Mexico’s heavy-vehicle truck exports go to the U.S. This strong dependence on the U.S. market caused the proposed new tariff to have an immediate and huge impact, even before it went into effect. 

More than 7,000 truckers are sidelined for English proficiency violations 
According to U.S. Transportation Secretary Sean Duffy, 7,248 commercial vehicle drivers have been placed out of service for failure to meet federal English language proficiency (ELP) standards so far this year. The new total, announced on October 30, represents a sharp rise from the statistic of 1,500 that was released in July. The U.S. increased roadside enforcement after the ELP rule was reinstated on June 25, 2025. According to a Federal Motor Carrier Safety Administration (FMCSA) database that aggregates roadside inspection violation data from across the country, 5,006 ELP out-of-service violations have been recorded in 2025.

Investment Trends  

Foreign companies continue to invest in Mexico, despite some of the challenges detailed in the 2025 Reshoring Index. The following represent the most recent infrastructure investments.

Sinoboom inaugurated its new plant in Guanajuato with an investment of $150 million USD, creating 700 jobs in the region. Based in China, Sinoboom manufactures aerial work platforms. German automaker Continental opened its second manufacturing plant in Aguascalientes, following a $90 million investment.  

Motherson Group, an Indian automotive manufacturer, will invest $50 million to expand its facility in Tlaxcala in order to meet Audi’s growing demand for its products. Shinhung Precision Machinery Co., headquartered in South Korea, announced a $40 million investment for a new plant in León, Guanajuato, generating 120 direct jobs and strengthening the state’s industrial capabilities. Taigene, a Taiwan-based automotive company, will invest $33.4 million to expand its plant in León, creating nearly 150 jobs.

Mexico Transportation Update

Over the last few days, Mexico experienced a wave of farmer-led demonstrations that resulted in temporary blockades across several major highways, including routes feeding the El Paso–Juárez border crossing. The protests were driven largely by concerns over agricultural policies and rising production costs, and they created significant disruptions for shippers. Many companies faced delayed pickups and deliveries, extended transit times, and congestion near key cross-border gateways. 

The situation has now been resolved, and authorities have restored normal circulation across the impacted corridors. While operations are stabilizing, we anticipate a gradual return to normal freight flow as carriers work through accumulated backlogs. 

At Redwood, our team closely monitored the events as they unfolded and supported customers with routing alternatives and operational workarounds. If similar disruptions occur in the future, we encourage you to contact your Redwood representative for guidance and proactive support to keep your supply chain moving. 

Redwood can help you manage challenges as you explore your own opportunities for cross-border growth and expansion. We’ve invested in building a strong presence in Mexico that includes over 200 bilingual experts, six facilities on both sides of the border, more than 400 carrier partners in Mexico, and 30,000 annual shipments.   

Learn more about our cross-border and international capabilities, or reach out to discuss your specific cross-border objectives.