Tariff uncertainty impacts state FDI

Foreign Direct Investment (FDI) data published by the Ministry of Economy (SE) for the first quarter of 2025 show that only six entities managed to attract more investment than in the same period of the previous year, which is a consequence of the tariff uncertainty generated by the United States government that led to the freezing of foreign capital flows to Mexico, Kristobal Meléndez, economic analyst, explained to El Economista.

Mexico City, the main recipient of FDI with $11.806 billion, also saw the largest decrease in absolute terms, with nearly $2 billion less than in the first quarter of 2024, representing a 14.5% drop, since "when FDI in general decreases, financial investments usually decrease," the specialist noted.

This "is significant because it is the country's most important financial and business center." The capital accounted for 55.2% of the national total FDI recorded from January to March, which is also attributed to lower investment in corporate services, a pause in real estate investments, fewer cross-border mergers and acquisitions, and a contraction in technology and digital companies, explained financial analyst Héctor Magaña.

Nationwide, FDI contracted by 21%, from $27.055 billion in the first quarter of 2024 to $21.373 billion in the same period in 2025. "Some investors are waiting to see how the tariff map will be defined to establish strategies for exact locations where to invest," said Meléndez.

Caution

Investor caution is reflected in a $5.681 billion reduction in foreign capital flows to the country, with decreases in 21 states, which particularly affects industries closely linked to international trade, such as the automotive and manufacturing industries, Magaña added.

Mexico City, Nuevo León, the State of Mexico, Baja California, and Guanajuato captured the largest FDI flows, together accounting for 80.3% of the national total; however, Baja California captured 35% less than in 2024.

Guanajuato recorded a 26.1% lower amount. "Tariff policies have a greater impact on the Bajío region. This region has competed with regions in the United States in recent years; protectionism has hit them hard," said Kristobal Meléndez. This is reflected in the declines in Aguascalientes, San Luis Potosí, and Jalisco.

Increases

In the north of the country, Nuevo León attracted 2.674 billion pesos, a 6.9% increase; Coahuila, with $538 million in FDI, grew 379.2% compared to 2024 and ranked seventh in training; and Tamaulipas saw an 18.4% increase in investment.

"Trump's policies took the Free Trade Agreement into account, so some northern states remain attractive to FDI until major factors change that strategy. The main reason is that these states have substantial trade with the central and eastern United States, which compete with Europe, and the tariff war indirectly benefits them," explained Kristobal Meléndez.

The State of Mexico saw a 60.9% or $715 million increase, which is related to specific industrial, logistics, and technological projects, or to investments that did not materialize in Mexico City, experts explained.

Quintana Roo, with $289 million, was the only state in the southeast that attracted more investment, "mainly due to new tourism developments; the Mayan Train makes it an attractive destination," Meléndez added.

In the west, Zacatecas is the only state that showed a recovery, going from a net capital outflow of $29.9 million in 2024 to an inflow of $12.1 million in 2025.

Durango, Guerrero, Oaxaca, Campeche, and Tabasco recorded negative FDI balances in the first quarter.