By Annya Bazúa and Rosie Alchalel*
Mexico and the United States share a roughly 1,959 mile border which has prompted decades of deep interaction and profound mutual influence for each countries’ economic and social development. This is especially true for states with close proximity to the border, including Baja California, Chihuahua, Coahuila, Nuevo León, Sonora and Tamaulipas.
The current political and economic context imposes a significant challenge for these states. On the one hand, they have emerged as some of the main beneficiaries of nearshoring due to their geographic location and industrial development. Nonetheless, they show a clear susceptibility to the United States’ current administration’s volatile tariff policies.
The State Competitiveness Index (Indice de Competitividad Estatal (ICE)), produced annually by the IMCO, categorizes states according to their capacity to attract and retain talent and investment. This year, the ICE emphasized the level of competitiveness of the distinct “corridors” or “wellbeing hubs” included in the current administration’s Plan México.
What does this data tell us about the competitiveness of the border states? In the subindex of innovation and economy, the states that make up this region tend to rank highly. For example, Nuevo León is in fourth place, Chihuahua in sixth, and Baja California in ninth. As a group, they occupy third place in economic diversity and second place in both economic complexity in the innovation sector and merchandise exports.
Despite these strengths, the tariffs implemented by the Trump administration pose a significant challenge for the group’s competitiveness. For the northern border states, the exports represent an averaged 71% of their GDP, a percentage significantly higher than other regions using the same ICE. This makes them particularly vulnerable to any modification in bilateral trade, given that any adjustment can impact their local economies and value chains.
Considering this context, it is vital to propose economic resilience strategies that might complement the commercial integration with North America and leverage Plan México as a means to strengthen the competitiveness of the border region. This strategy aims to boost national production and generate employment without conflicting with trade liberalization.
Plan México also proposes increasing the national added value in strategic sectors, such as the automotive and electronic sectors, which represent around 40% of the country’s exports to the United States. In this context, Mexico must seek strategies that leverage its trade networks with the rest of the world.
The border state’s competitiveness, particularly in the context of imposed tariffs, requires rethinking strategies that promote economic diversification and leverage Plan México from a regional perspective. Additionally, it is important not to forget that, with its advantages and disadvantages, the region’s proximity to the United States imposes inevitable conditions that are and will always be part of the region’s DNA.
Published in Animal Político
24-07-2025
*Interns in the Society Program at IMCO. Annya studies political science and economics at New York University and Rosie studies political science at Barnard College.
