Borderlands Mexico: Canada, Mexico draw record foreign investment in 2025

Core Insights - Canada and Mexico attracted record levels of foreign direct investment (FDI) in 2025, highlighting North America's increasing significance as a global manufacturing and supply-chain hub despite trade-policy volatility [2] Group 1: Canada - Foreign direct investment into Canada reached $96.8 billion in 2025, the highest since 2007, with fourth-quarter inflows of $25.1 billion driven by mergers and acquisitions in trade, transportation, and manufacturing [3] - U.S.-based investment was a major contributor to Canada's inflows, with total net investment exceeding outflows for the year, marking a reversal from 2022 when capital flight outpaced inflows [4] - Canadian direct investment abroad decreased to $79 billion, the lowest since 2020, indicating a slowdown in overseas mergers and acquisitions [4] Group 2: Mexico - Mexico achieved a historic peak in FDI, attracting $40.871 billion in 2025, a 10.8% year-over-year increase, marking the highest level ever recorded in a single year [5] - Reinvestment of profits constituted 67.7% of total inflows, while new investments surged by 132.9% to $7.38 billion, indicating new project launches related to nearshoring and industrial expansion [5] - The U.S. remained Mexico's largest investor, contributing $15.877 billion, or 38.8% of total inflows, with Canada and Spain also being significant sources of capital [6] Group 3: Regional Supply Chains - The investment surges in Canada and Mexico occurred alongside a decline in global FDI flows to developing economies in 2025, suggesting a strong commitment to production capacity and infrastructure across North America [7] - Despite tariff volatility and political uncertainty, the data from 2025 indicates that investors are making long-term commitments to North America as a consolidated production platform [8]