On November 14, 2025, the Inter-American Dialogue hosted the virtual event, Mexico at the Crossroads: Navigating U.S.-China Tensions. The discussion, moderated by Juan Pablo Spinetto of Bloomberg, analyzed the complexities of Mexico’s position amid intensifying U.S.-China rivalry, focusing on the realities of “trade triangulation,” the strategic risks of Chinese foreign direct investment (FDI) in the electric vehicle sector, and the implications for the upcoming USMCA review.
Lila Abed, director of the Mexico Program at the Inter-American Dialogue, opened the discussion by framing Mexico as squarely in the middle of global geopolitical tensions. Abed highlighted Washington’s growing concern that Mexico serves as a “backdoor” for Chinese investment seeking to circumvent U.S. tariffs. She noted that Mexican President Claudia Sheinbaum’s “Plan Mexico” aims to balance these pressures by reducing imports from Asia and strengthening North American integration, signaling a clear understanding of the geopolitical stakes.
Margaret Myers, senior advisor for the Asia and Latin America Program at the Inter-American Dialogue, characterized Mexico as an outlier in China–Latin America relations due to its manufacturing focus. Myers noted a general “tapering” of Chinese economic engagement, shifting toward specific high-tech sectors. Citing a recent Dialogue report on the auto sector, Myers explained that, in contrast to the narrative of booming Chinese manufacturing in Mexico, the “real story” is a surge in trade and auto-parts imports driven by China’s need to offload excess capacity. Consequently, Myers viewed potential new investments by Chinese electric vehicle (EV) giants like BYD as commercially unviable without U.S. market access, describing current trends as a move toward direct exportation rather than deep industrial footprints.
Sergio Luna, chief economist for Grupo Financiero Mifel, provided a macroeconomic perspective, tracing the shift from the “NAFTA bliss” of the 1990s to the disruption caused by China’s WTO entry. Luna highlighted that while U.S. tariffs reduced China’s share of the U.S. import market, China’s share of Mexican imports skyrocketed to roughly 20 percent, suggesting significant “trade triangulation.” Luna argued that Mexico’s “privileged postal code” necessitates strict alignment with U.S. geopolitical interests. He proposed a common external tariff for North America and warned against allowing Chinese investment in data-sensitive sectors like EVs due to national security risks.
Beatriz Leycegui Gardoqui, partner at SAI Derecho y Economía, expanded on the tariff discussion, noting that U.S. unilateral measures have placed regional producers at a disadvantage. While urging companies to utilize “Rule 8” to import inputs duty-free for re-exportation, she suggested that Mexico should not flatly reject Chinese investment, but rather enforce strict reciprocity and local content standards similar to those China historically imposed on foreign investors. For the upcoming USMCA review, Leycegui Gardoqui contended that the agreement is effectively being “unilaterally renegotiated” via U.S. enforcement, predicting that formal talks will likely codify new restrictions such as “origin of investment” rules.
Looking forward to the 2026 USMCA review, participants emphasized that the future of North American trade will be “co-produced” by evolving Chinese strategies and U.S. domestic politics. Noting internal Mexican challenges, specifically judicial reforms and energy policy, as potential obstacles, the panel urged the private sector to take a proactive role in shaping the trilateral agenda before the review process concludes.
