Mexico: Up-and-coming American hot spot for trade and production

Location Mexico, Source: Adobe Stock

Mexico, the heart of Latin America, is increasingly establishing itself as one of the most sought-after hubs for trade and production worldwide. Particularly in the steel industry, the country plays a key role as a supplier for global sectors such as the automotive, aerospace, medical devices and electronics industries. But what makes Mexico so attractive for investors and companies? Our report sheds light on the special advantages of this emerging economic power.

Mexico, the second largest economy in Latin America (Mexico is ranked 14th in the world), attracts international attention due to its strategic geographical location, stable political conditions and favorable economic environment. Its geographical proximity to the United States and Canada, as well as a network of free trade agreements offering access to 46 countries and 1.2 billion consumers, make the country an ideal location for foreign investment.

Beneficiaries of nearshoring

In recent years in particular, Mexico has benefited from global trends such as nearshoring, as more and more companies are relocating their production capacities closer to key sales markets. With a Doing Business score of 72.4 (in 2020) and extensive investment in infrastructure and education, Mexico offers a highly attractive environment for business activities.

But Mexico is not just a trading center - the country has also developed into a preferred manufacturing location. From the automotive to the electronics industry, industry clusters in various regions play a decisive role. In the steel industry, Mexico stands out in particular, as it is an indispensable supplier to many global industries.

Mexico's gross domestic product in the period 1980-2029, Source: Statista

Protectionism of the USA

It is not yet clear to what extent the rapid economic growth of recent years will now be dampened and slowed down by Donald Trump's renewed presidency. In particular, if the Trump administration were to impose a 25% import tariff on all goods from Mexico, as announced, this would have a significant negative impact on the Mexican economy, as around 80% of Mexican exports go to the USA. However, this would also have such drastic negative consequences for the US economy that economic experts are already predicting that the US will not be able to sustain this tariff policy for long without suffering considerable damage itself.

Mexico's raw materials and energy situation

Despite the USA's increasing industrial protectionism under Trump, Mexico has now also become a major producer and supplier of crude oil and natural gas. In 2022, the country was the eleventh largest oil producer in the world with a production of 1.9 million barrels per day; a slight increase is expected for 2023 and 2024.

Despite this high production quota, Mexico is dependent on energy imports, particularly for natural gas. Although the country produces around 30 billion cubic meters of natural gas every year, it has to import more than 50 billion cubic meters annually to satisfy its hunger for energy.

Mexico makes up for the shortfall in its own gas production by importing pipeline gas from the USA and LNG. The country was one of the main beneficiaries of the US shale gas boom. US natural gas exports have skyrocketed over the past decade, making domestic energy prices vulnerable to international market conditions.

Driving force steel industry

The steel industry is one of Mexico's key industries. With a steel production of around 16.2 million tons in 2023 (Statista: “Mexico's steel production”), Mexico took 15th place in the global ranking. The industry benefits from the country's strategic location, low production costs and close links to international markets.

Major international automotive cluster

The automotive industry in Mexico is one of the most important customers of the steel industry. With ten international car manufacturers, including BMW, Ford, Volkswagen and Nissan, as well as numerous suppliers, Mexico has built up a strong automotive base. In 2023, over 4 million passenger cars were produced in Mexico. The use of steel for car bodies, chassis and other vehicle components is essential.

The center for automotive production is located in regions such as Guanajuato, Querétaro and Coahuila. Particularly noteworthy is the role of Monterrey, which is often referred to as the “Detroit of Mexico” due to its highly skilled workforce and established infrastructure.

Mercedes at the ALUMINIUM 2016, Source: Behrendt und Rausch

Strong growth in the aerospace industry

Another important sector that benefits from the steel industry is aerospace. Every year, Mexico exports components such as landing gear, turbine blades and structural parts made from high-quality steels. Centers such as Querétaro and Baja California are home to numerous companies in the aerospace industry that rely on Mexican steel as the basis for their highly specialized products.

Steel products: Wires, tubes and their applications

Wires made from Mexican steel are used in a wide range of sectors, from the automotive industry to the manufacture of medical devices. Due to their flexibility and stability, they are essential for products such as cable harnesses, surgical instruments and components for electronics.

Mexico's steel manufacturers are increasingly relying on technological advances to produce wires with precise specifications. This specialization has contributed to the high demand for Mexican wires in the US, Germany and other highly developed markets.

Wire rod production, Source: ArcelorMittal

The production of steel pipes is also an important part of the Mexican steel industry. These are frequently used in the energy sector, the construction industry and the transportation sector. The market for the use of pipes is particularly pronounced in the oil and gas industry, where they are indispensable for drilling and pipelines.

Mexico exports a large quantity of these steel products to the United States, where they are considered a high-quality and cost-effective alternative.

Pipe welding system, Source: Arvedi Metalfer do Brasil

Other industries: Medicine, electronics and household appliance manufacturing

The Mexican steel industry also plays a key role in the production of medical devices. Small, highly specialized parts made of stainless steel are used in surgical instruments, implants and other medical devices. Centers such as Baja California and Nuevo León are leaders in this industry.

Mexico has also established itself as an important location for electronics production. Steel is used here for components such as housings, frames and other load-bearing parts. Manufacturers in Jalisco, which is also known as the “Silicon Valley of Mexico”, benefit from the high quality of Mexican steel.

Fiber laser cutting machine cuts a stainless steel tube with CNC program control, Source: Adobe Stock

Mexican steel is also widely used in the household appliance industry. Manufacturers such as Whirlpool and Siemens use steel components for the production of washing machines, refrigerators and other appliances.

Outlook: Mexico's future in the steel industry

Thanks to its strategic location, competitiveness and robust infrastructure, Mexico will continue to expand its position as a global steel producer and supplier in the coming years. Investments in research and development as well as the digital transformation of the industry offer promising growth prospects.

Hydrogen power plant with steel tanks, Source: Adobe Stock

The acquisition of National Material of Mexico by Klöckner & Co in 2023 is one of many examples of how international companies are recognizing and exploiting the potential of the Mexican steel industry. With a modern infrastructure and the continuous qualification of its workforce, Mexico is well equipped to meet the increasing demands of global markets.

Conclusion: Mexico as a dynamic hub for industry and trade

Mexico has developed into a globally important center for production, trade and innovation. With its strategic location, a broad network of free trade agreements and a growing industrial infrastructure, the country offers optimal conditions for investment and business growth. Sectors such as the automotive, steel and aerospace industries are flourishing, supported by the favorable framework conditions and close links with international markets.

The wire and Tube Mexico 2025 trade fairs underline this dynamism by bringing together the leading minds and companies in the wire, cable and tube industries in Monterrey. Exhibitors from around the world will showcase innovative technologies and sustainable solutions, while an extensive supporting program of conferences and workshops will promote knowledge transfer and networking. With over 140 international exhibitors and a strong focus on digitalization and automation, wire and Tube Mexico offer an ideal platform to strengthen business relationships and forge new partnerships.

European visitors benefit from a unique opportunity not only to tap into new markets, but also to experience the pulse of the Mexican economy at first hand. Mexico, as the largest trading partner of the USA and a key player in the global supply chain, is an indispensable hub for innovation and production. Therefore, wire and Tube Mexico 2025 is not just a trade fair, but a showcase for the future of industrial manufacturing in one of the world's most exciting growth markets.

You can also find out more about Mexico as a production and trade location at the next wire & Tube, which will take place in Düsseldorf from April 13 to 17, 2026. The latest industry and product information can be found on the internet portal at www.wire-tradefair.com.

Further information and sources

FinanzNewsOnline.de – „Mexiko als Produktionsstandort: Was sind die Vorteile?“ (finanznewsonline.de)

Statista – „Mexico‘s Steel production“ (statista.com)

Tetakawi Insights – „Produktion und Investition in Mexiko: Alles, was Sie wissen müssen“ (insights.tetakawi.com)

GTAI – „Economy in Mexico“ (gtai.de)

WMP Mexico Advisors – „Der richtige Standort in Mexiko“ (wmp.mx)

Klöckner & Co SE – Pressemitteilung „Erwerb von National Material of Mexico“ (kloeckner.com)

Tetakawi Insights – „Die sechs wichtigsten Industrien in Mexiko“ (insights.tetakawi.com)

El País – „El peso mexicano cae tras el anuncio de Trump de que impondrá aranceles a México y Canadá a partir del 1 de febrero“ (elpais.com)

Nau.ch – „Weshalb Mexiko besonders unter Trump leiden wird“ (nau.ch)

Germany Trade & Invest (GTAI) – „Ausländische Firmen bringen Bewegung in Mexikos Ölsektor“ (gtai.de)

Delegation der Deutschen Wirtschaft in Mexiko (AHK Mexiko) – „Factsheet Energieeffizienz in der Industrie in Mexiko“ (mexiko.ahk.de)