Mexico Is Cashing In as US-China Tensions Upend Trade

Goodbye 'Made in China'? Hello 'Made in Mexico'? Leda Alvim explains how nearshoring could benefit the region.

Industrial parks and warehouse operators in Mexico, desperate for electricity to power their booming operations, are offering to pay out of their own pockets to build solar panels. But that threatens government control of energy markets.

On top of a strained national grid, demand for electricity is only expected to grow as giants like Tesla Inc. and others set up operations amid a trend known as nearshoring, especially in the country’s north.

Mexico caps self-generated renewable energy at 500 kilowatts in what’s called “distributed generation.” Industrial parks association AMPIP is asking the government to expand that limit, one of the workarounds to boost much-needed capacity. As the world slowly moves away from fossil fuels, President Andres Manuel Lopez Obrador has increased the country’s reliance on them at the expense of private sector-led renewable projects.

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