weighted score 4.2 · five dimensions
Geopolitical & Concentration Risk
Mexico
Geopolitical conflict, supplier concentration, climate exposure, sanctions risk and policy continuity intelligence for Mexico-origin supply chains.
Geopolitical conflict
5
No international conflict. Significant cartel-related organised violence — 30,000+ homicides per year. Materially affects supply chain security in some regions (Guerrero, Michoacán, Tamaulipas).
Supplier concentration
4
Significant global market share in automotive parts, avocados, beer, tequila, and medical devices. Not monopoly-level concentration for EU-relevant sourcing categories.
Climate & physical risk
5
Hurricane exposure on both Pacific and Atlantic coasts. Seismic risk — 2017 earthquake (M7.1, 370 deaths). Drought affecting northern agricultural regions.
Sanctions exposure
2
No country-level sanctions. Extensive cartel-related entity designations on US OFAC SDN list. Generally not relevant for legitimate commercial supply chains.
Policy continuity & property rights
5
Recent administrations brought significant policy shifts — energy sector nationalisation trends, 2024 judicial reform. Property rights generally respected but investment certainty reduced.
Security & Internal Risk
Security & Internal Risk
- Cartel violence
- Mexico's homicide rate is among the highest in the world. Cartel-related violence is concentrated in specific states (Guerrero, Michoacán, Tamaulipas, Sinaloa) but can spill into industrial corridors. Major manufacturing regions (Bajío, Nuevo León) have lower but non-zero security risk.
- Supply chain impact
- Cargo theft and extortion affect road logistics in some regions. Companies in affected areas invest significantly in security infrastructure. Northern border logistics (Laredo, El Paso crossings) are generally secure.
- US-Mexico relationship
- The US-Mexico economic relationship is one of the world's deepest bilateral trade partnerships. US security cooperation (Mérida Initiative successor programmes) supports Mexican law enforcement. Economic interdependence provides structural stability despite political friction.
Policy & Investment Environment
Policy & Investment Environment
- Energy policy
- The AMLO administration (2018-2024) pursued energy sector nationalisation — strengthening CFE and Pemex at the expense of private energy investment. The Sheinbaum administration has continued this direction. Foreign investors in renewable energy have faced regulatory uncertainty.
- Judicial reform
- The 2024 judicial reform — introducing elected judges — has raised concerns among foreign investors about rule of law predictability. The full impact on contract enforcement and dispute resolution is not yet clear.
- Nearshoring tailwind
- Despite policy uncertainty, Mexico continues to attract significant nearshoring FDI. The structural advantages (USMCA access, proximity to US, large workforce, existing industrial base) outweigh policy risk for most manufacturers.
- Property rights
- Foreign ownership of manufacturing facilities is generally well-protected. Expropriation risk is low but not zero — energy sector precedents create some uncertainty for capital-intensive investments.