Mexico faces investment slowdown as T‑MEC enters annual review

The United States announced it will not extend the North American trade pact (T‑MEC) beyond its automatic expiry in 2036, triggering an annual‑review mechanism that keeps the agreement’s rules in place but creates prolonged uncertainty. Rating agency Fitch and French bank Natixis warned that the extended review period could deepen business‑investment hesitancy, especially for the automotive sector, which accounts for billions of dollars in exports and jobs.

Mexican state governments and industry groups reported projects on hold. Coahuila’s economy secretary said eight to ten automotive‑related projects, worth roughly 6 billion pesos and 2,500 jobs, are paused. Veracruz’s Coparmex and Chihuahua’s development office echoed concerns that near‑shoring and new foreign‑direct investment are being delayed pending clearer trade rules. Environmental NGOs in the United States, led by Wildcoast, are also pushing to embed binding river‑Tijuana water‑quality measures in the upcoming T‑MEC negotiations.

Analysts noted that stricter rules of origin—particularly a possible U.S. demand for 50 % domestic content in vehicles—could further strain Mexico’s manufacturing competitiveness. Together, the trade‑policy uncertainty and related environmental and regulatory debates threaten to slow investment flows across the three‑nation bloc.