Why Investment Uncertainty Is Holding Mexico Back

Mexico has experienced record levels of foreign direct investment in recent years, as the drive for supply chain security has created a boom in interest in Mexico’s manufacturing sector. Yet, when measured overall, investment is down in Mexico. Two issues stand out as driving investment decline: uncertainty around fiscal governance and tax regulation enforcement. In this episode, Ryan C. Berg sits down with Denise Dresser, Senior Associate with the Americas Program at CSIS and professor of political science at the Autonomous Technological Institute of Mexico (ITAM). Together they discuss how changes to Mexico's regulatory, and particularly tax environment are undermining investor confidence and contributing to broader concerns related to the upcoming 2026 Joint Review of the U.S.-Mexico-Canada free trade agreement. They also explore the ways in which tax policy intersects with the issues Mexico faces over judicial independence, insecurity, and diplomatic tensions with both the United States and Canada.