Deep Dive: Citi study indicates Vietnam and Thailand as top nearshoring destinations over Mexico

From a geopolitical perspective, the preference for Vietnam and Thailand in nearshoring reflects shifting power dynamics in global trade, where companies seek stability amid US-China tensions, making Southeast Asian countries attractive due to their alliances and trade agreements that reduce risks associated with over-reliance on any single region. The International Affairs Correspondent lens highlights how this trend affects cross-border supply chains, potentially increasing migration of skilled labor to Asia and altering humanitarian aspects like job creation in developing economies, while Mexico's proximity to the US fails to outweigh factors such as infrastructure or regulatory environments in investor decisions. Regional Intelligence provides context that Vietnam and Thailand's cultural emphasis on manufacturing and export-oriented economies, shaped by historical colonial influences and post-war development, make them appealing, whereas Mexico's rich history of North American trade integration has not fully capitalized on these opportunities. Key actors include global corporations and investors whose strategic interests lie in cost efficiency, market access, and risk diversification, with nations like Vietnam and Thailand positioning themselves through policies that enhance their appeal in global value chains. This development underscores why events like nearshoring matter, as it influences diplomatic relations and economic dependencies, potentially drawing more foreign direct investment into Asia at the expense of Latin America. Understanding these patterns requires recognizing the nuanced interplay of historical trade policies and cultural adaptability in regions like Southeast Asia, which have fostered environments conducive to rapid industrial growth. The implications extend to broader economic strategies, where countries must adapt to maintain competitiveness, illustrating how nearshoring reshapes global economic landscapes and affects international relations by prioritizing certain regions over others based on multifaceted factors beyond mere geography.