BoA Mexico Head Says Nearshoring Will Continue

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Given that the United States-Mexico-Canada Agreement (USMCA) negotiated during Trump’s previous administration is due for renegotiation in 2026, chances are that the second option is the more likely. Trump’s complaints aren’t really based on trade and economics, so it would seem a way to create confusion and uncertainty.

Not that anything will ultimately change in the view of Bank of America. In a press briefing, Bank of America's Mexico head, Emilio Romano, said, “It will be very difficult for uncertainties, either internal or external effects to alter or modify the opportunities that we see in Mexico,” as Reuters reported . "We believe that the nearshoring or friendshoring phenomenon will not be reversed.” He also said that the bank expects to double revenue, with client volume growing from 400 to 800, all over the next five years in Mexico. The bank focuses on institutional banking services and doesn’t serve individual clients.

It is making a bet on an economic reality that the U.S., Mexico, and Canada are interdependent partners. Between Mexico and the U.S. alone, there are 2,000 shared miles of border, 47 active land ports of entry, and 200 years of diplomatic relations says the State Department . Total two-way trade totaled $807 billion ($322 billion from the U.S. to Mexico) in 2023, even more than the $782 billion with Canada and $576 billion with China.

There is a lot of shipment back and forth of petroleum products. The U.S. makes and sends motor vehicle parts while Mexico sends assembled cars as an example. The interaction in manufacturing, with parts and assemblies moving repeatedly across the border for different assembly stages, means the necessity of warehousing, manufacturing, and logistics in the U.S. to keep up.

Mexico has 13 trade agreements with 50 countries, 32 investment promotion agreements, and nine limited economic agreements. This includes pacts with Japan, the EU, and many Latin American nations. Mexico is an important connection to international trade, again creating a need to warehouse goods prior to shipping across one border and then off to many others.

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BoA Mexico Head Says Nearshoring Will Continue

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