Trump’s tariffs and accelerating trends in robotics and AI should be a wake-up call for Mexico.
Part 2: Why is a rethink of the Mexican economy necessary?
Part 3: What could a rethink of the Mexican economy look like?
The purpose of this three-part series is to reflect on the emerging trends of trade protectionism (tariffs), AI and robotics, consider the potential impacts on Mexico and foster a discussion on possible solutions. Please share your thoughts in the comments section and let’s have an inspiring and engaging discussion and debate.
Part 3: What could a rethink of the Mexican economy look like?
As mentioned in Parts 1 and 2 of this series, Mexico must increasingly look to expand beyond the manufacturing sector to ensure that it can continue to provide economic growth and employment opportunities for its people.
Mexico’s economic future hinges on its ability to leverage the country’s many unique strengths in this era of geopolitical and technological transformation. Building on the discussion and rationale established in Parts 1 and 2, this final essay outlines actionable strategies for diversifying the economy, reducing dependency on manufacturing, and embracing sectors where Mexico has clear opportunities.
1. Tourism: Elevating cultural and environmental strengths
Tourism is an area in which Mexico already has created a tremendous economic driver and it already represents 9% of the Mexican economy. That being said, the country’s still-untapped tourism potential is massive, with countless beaches, colonial cities, archaeological wonders and biodiverse landscapes still relatively undiscovered. Each offers opportunities to attract travelers of all types. Mexico has the opportunity to move up the value chain in tourism, with an eye on attracting higher-spending and more adventurous travelers. I am constantly surprised at how many people who have traveled all over Europe have barely left a Mexican all-inclusive resort — this is a huge untapped opportunity!
The global demand for experiential travel — culinary tours, eco-adventures and cultural immersion — aligns perfectly with Mexico’s 35 UNESCO World Heritage sites and vibrant Indigenous traditions. The recently completed Maya Train has 20 major stations with 23 Maya communities along the route that offer significant tourism opportunities.
Proximity to the U.S. provides an obvious logistical benefit, with shorter travel times and lower costs compared to many overseas destinations. Mexico’s strong hospitality and service culture is a natural advantage. Strategic investments in rural infrastructure — improved roads to Chiapas waterfalls or sustainable lodges in Michoacán’s monarch butterfly reserves — could unlock underserved regions. Collaborations with platforms like UNESCO to certify cultural experiences would enhance global appeal. Mexico can look to countries like Croatia, Slovenia and Albania for tourism lessons learned on how to compete and differentiate in a crowded market.
2. Medical Tourism: Positioning as a regional health hub
Mexico’s medical sector can position itself much better to capitalize on cost disparities and quality care. Procedures such as dental work, cosmetic surgery and elective treatments often cost less than half of what they would in the U.S., with outcomes that meet or exceed international standards. Over the years on flights to Mexico I have heard many stories of flight attendants and pilots that are taking advantage of these types of services, but I think that most people are still not aware they exist. Border cities like Tijuana and other cities with easy international access like Monterrey, Cancún and Los Cabos already are building clinics that cater to foreign patients.
Mexico should look to Thailand as a model. The Southeast Asian country now attracts over 3 million medical tourists annually by combining affordability with internationally accredited hospitals. The country standardized certifications and built “medical corridors” near Bangkok and Phuket, offering recovery resorts with telehealth follow-ups. Many hospitals in Mexico already target foreign patients, but scaling up would require significant and systemic upgrades from the reality of today.
Standardizing accreditation across hospitals and clinics would build trust, while partnerships with U.S. insurers could streamline coverage for cross-border care. Insurance companies would benefit from much lower costs. Chronic disease management, such as dialysis or diabetes treatment, seems like an obvious opportunity. Clear processes enabling physician communication between U.S. and Mexican facilities would help patients feel at ease. Establishing specialized clinics coupled with telehealth follow-ups would create a seamless patient experience and position Mexico as a leader in affordable, high-quality care.
3. Senior care: Addressing a global demographic shift
The aging U.S. (and global) population presents another significant opportunity. With senior care costs often exceeding $100,000 annually in the U.S., Mexico’s lower living expenses, lower cost care and temperate climate offer an attractive alternative. Communities like Lake Chapala and San Miguel de Allende demonstrate the viability of retirement enclaves, but demand for assisted living and memory care far exceeds supply of such services.
Mexico’s familial culture and emphasis on community align with seniors’ needs for social connection — especially in a world where children increasingly live far from their parents. Public-private partnerships to develop accredited senior living facilities, staffed by trained caregivers, could generate thousands of local jobs while providing dignified care. Collaborating with U.S. insurers to recognize Mexican providers would legitimize the sector and attract investment. Reputable law firms are critical to provide advice, guidance, and help safe-guard patients against fraud.
4. Expat communities: Fostering integration and innovation
The rise of remote work has created a new demographic: professionals seeking affordable, culturally rich environments. Cities like Mérida and Querétaro blend historic charm with modern amenities, appealing to digital nomads, families and retirees alike. Success hinges on integration — ensuring expats contribute to local economies without displacing communities.
Municipal initiatives to streamline visas, property regulations and bilingual education would attract long-term residents. “Innovation districts” with co-working spaces and startup incubators could foster knowledge exchange between expats and local entrepreneurs, driving economic diversification. Purpose-built communities with expats in mind are an obvious opportunity.
5. Food: Globalizing Mexico’s gastronomic legacy
Mexico’s culinary heritage, recognized by UNESCO as an Intangible Cultural Heritage, is a cornerstone of national identity — yet its global potential remains underdeveloped. While tacos and tequila have achieved international fame, regional dishes like Oaxaca’s mole negro has yet to achieve the international acclaim of Italian or French staples.
Los Cabos’ farm-to-table scene, pioneered by destinations like Flora Farms, demonstrates that there is massive demand for culinary tourism. Expanding this model to states like Michoacán, Puebla, Oaxaca or Guanajuato — key agricultural regions in Mexico — could help transform rural economies. Imagine agro-tours where visitors harvest Mexican blue corn alongside local farmers, followed by cooking classes with Michelin-trained chefs. Such experiences align with travel trends, where tourists are increasingly prioritizing food-focused adventures.
This would go a long way in softening the still-negative perceptions many foreigners have about Mexico. Peru’s gastronomic rise is an example of how food can reshape national perception. Strategic campaigns, such as a Netflix docuseries on Mexico’s culinary diversity or partnerships with international chefs, could be hugely impactful.
6. Cultural wellness: Exporting traditions of well-being
In a world grappling with burnout and anxiety, Mexico’s ancient wellness practices offer respite. The global wellness tourism market increasingly values holistic, culturally rooted experiences. Mexico’s temazcal ceremonies, herbal medicine remedies and communal rituals provide alternatives to conventional retreats, blending spirituality with science. Luxury resorts in places like Tulum, Los Cabos and the Riviera Nayarit have begun integrating these elements. Yoga retreats, addiction clinics, meditation and silent retreats are all growing areas of wellness with significant opportunities for Mexico with the right organization, support, and investment.
7. Infrastructure: Enabling sustainable growth
Mexico’s infrastructure gaps — often substandard roads, unreliable energy and spotty digital connectivity — hold back the country’s economic potential. Infrastructure, which should act as an enabler and accelerator, far too often in is a drag on growth. President Sheinbaum’s Plan México does have significant emphasis on infrastructure and energy, but much work remains to provide the backbone to support and enable growth on a broader scale. If the vast majority of foreigners don’t feel comfortable renting a car or taking a bus or train in the country, countless economic opportunities will not be realized.
Sheinbaum unveils an even more ambitious version of her transformative Plan México
So what is the bottom line? Mexico’s manufacturing era isn’t ending — it’s evolving. Mexico will continue to provide a significant role in the global manufacturing supply chain, but the country must look to further diversify its economy to ensure continued economic and employment growth in the years ahead.
Mexico’s path forward requires bold vision and pragmatic collaboration. The seven sectors outlined here — tourism, medical services, senior care, expat integration, food, wellness and infrastructure — are interconnected pillars of a modern, resilient economy. Each leverages Mexico’s geographic, cultural and demographic strengths while promising to create job opportunities across the country. As manufacturing automation increases around the world, perhaps Mexico’s path forward is to become the hemisphere’s hub for experiences, care and culture.
The transition will require alignment across government, private industry and local communities. Regulatory reforms to incentivize sustainable tourism, healthcare accreditation and expat-friendly policies are critical first steps. Equally important is storytelling — showcasing Mexico not just as a manufacturing hub, but as a leader in the seven areas mentioned.
The team at Mexico News Daily will continue to monitor developments in these areas, and we are committed to highlighting stories of success, progress and partnerships. The challenges are significant, but the opportunities for the country could be transformative.
What do you think? Please share your comments, and thank you for reading MND.
Travis Bembenek is the CEO of Mexico News Daily and has been living, working or playing in Mexico for nearly 30 years.
Great capstone article to this excellent three-part series.
Bang on. Brilliant series.
Safety is the linchpin for all opportunities for
growth highlighted above. If foreigners felt truly safe coming to Mexico, the numbers would mushroom. The fear of cartels keep company’s from relocating, vacationers from vacationing, expats from retiring, and investors from investing in this incredibly beautiful country. I think we’re a very long way from instilling that confidence in others.
Kudos to you for tackling this subject. As much as I value your perspective, I wish MND would offer more perspectives from Mexican economists and media analysts. Not the usual spokespeople for business groups. I know it seems crazy, but Mexican newspapers and print publications still hold sway here. Mass media, and their counterparts in the U.S. (Telemundo and Univision) have a mass following among Hispanic communities up north, as well. It would be nice to see a survey of many voices, instead of just yours.
Great series!! I agree 100% with Randy who expressed it very well. A handle on public safety, not only for tourists and investors, but for the country as a whole is crucial to growth.
In regards to #1, I find it curious that even though Mexico is a popular cruise destination on both coasts, there are no major cruise lines that operate from a Mexican port as a point of origin. It seems like a perfect fit for the already existing infrastructure and would definitely bring in tourists from all over the Americas if not the world. Galveston, Texas has dramatically increased tourism to that part of the state by becoming a major cruise port of origin.
The docks at the Marina in Puerto Vallarta were all redone and it was supposed to be a point of departure. I don’t know why that has not happened.
It was going to be a point of departure for a budget cruise line owned and operated by Vidanta, the mega complex just across the state line in Nayarit. The idea was to create a cruise line that would be affordable to middle class Mexicans (and there are millions in the region, especially in Guadalajara). They even bought – or perhaps leased? – a ship. But I think the idea went south with the COVID pandemic and it has not been revived. It does seem like a great idea.
Excellent series, thanks for the insightful analysis.
A very good article. The problems I see living in Lake Chapala area and travelling to a few beaches in Jalisco and Nayarit is over development with proper sewage and water treatment not keeping pace. Also drought conditions in many parts of the country hamper industrial development and cause problems for big cities such as Mexico City and Guadalajara. In Ajijic/ Chapala area it seems almost every vacant lot is being built on and I don’t see or hear of any new sewage treatment plant being built! One can assume that some sewage is being dumped into the lake. If AI does land up being used in factories with advanced robotics etc many manual labor jobs may be lost (Bill Gates made that prediction recently). Without a highly educated population many will not have access to the traditional factory jobs. Mexico depends mucho on tourism but I have my doubts that all the hotels being built on the coastlines now will keep ocean waters pristine. On a recent trip to Los Ayala where my favorite beach was( near Guayabitos) I saw effluent floating on the water and they waved us out for a short period until it floated away. That’s the end of my trips there. It seems quick profits for a select few is becoming the norm here as in many other developing world countries.
Truth. That is why we sold our property in Vallarta. It was overbuilt and no longer quaint and peaceful. We moved to Ajijic and it is getting even worse. Money talks. Period.
Agree re Lake Chapala area.
I am very concerned about where the water comes from and where it goes. We get no municipal water from about 8pm to about 8am. Plus the increase of traffic.
Security issues need to be resolved for the country to move forward.
Low wages help Cartels grow.
The country needs to start paying
People Better wages , more opportunity for alternatives to crime. The Rich Are too Greedy and are a big part of the problem.
While this is a thoughtful and comprehensive article — and I applaud the practical focus on sectors like tourism, medical services, and senior care — I’m struck by what feels like a significant vacuum at the core of the strategy: education.
How can Mexico, or any nation, build a resilient, diversified economy in an age defined by AI, robotics, and global mobility without first strengthening its educational foundation? Nearly every opportunity listed — from medical tourism to innovation districts and culinary exports — ultimately depends on an educated workforce, capable of adapting, evolving, and seeing opportunity where others may not.
Yes, many of the outlined sectors generate lower-barrier employment, and that is valuable. But if Mexico is to move beyond low-wage jobs and compete meaningfully in the global value chain — not just as a supplier of labor or location — it needs widespread access to quality education, technical training, and digital literacy. That means investments not just in infrastructure or marketing, but in public education systems, vocational pathways, and entrepreneurship education that can equip the next generation to lead, not just serve.
If Mexico wants to lead the hemisphere in “experiences, care, and culture,” it must also lead in human capital development. Without that, much of the potential so vividly described here risks remaining just that — potential.
As a 50 year resident of Mexico and a former teacher and school director, I totally agree. Quality education is the key to economic success. As an example, see S. Korea’s post-war rise as an economic powerhouse, which would not have been possible without a highly educated populous.
While I agree with you – the quality of education needs to be significantly improved – and having lived in Mexico for over 20 years, I am always struck by how many university graduates are working as waiters and other service jobs. Lawyers, computer engineers, biologists… Mexico is actually turning out more college graduates than it can employ in their professions. Now, could the universities do a better job of preparing these kids? Of course! But we need more demand for high-skilled professionals, engineers, medical and other scientific researchers… Investment is a big piece of what’s missing.
Another well thought out article, and a good ending to this series of articles. The points mentioned along with the commentary from readers highlight some important issues Mexico will need to manage in order to grow in the new world order that Trump has initiated. I feel that ultimately, the best outcome would be a united US, Mexico, & Canada that can lead the new Nationalism & Unilateralism structure that nations across the globe are starting to take. While Trump’s policies seem/are crazy, I believe the politics and policies that have guided the world over the last 80 years are in need of change. The world is different now and we cannot continue to govern in the same old ways. There are more diplomatic approaches that should be taken, and North America should look at how to stand as one. I believe we are entering a time of big global change. Ensuring Mexico is able to adapt and grow in the new economy can only help to ensure the US values and partners with Mexico as we move into the new global structure.
To quote Travis, “If the vast majority of foreigners don’t feel comfortable renting a car or taking a bus or train in the country, countless economic opportunities will not be realized.” Security is paramount. My family and I used to do road trips all the time without a thought to our safety because it wasn’t a concern. This has changed. In many parts of Mexico, even driving during the day has become dangerous. In order for Mexico to progress, it must resolve the security issue immediately.
I can’t put my finger on it, but you get off the plane, and somehow, you don’t have at “feeling” of arriving at a safe place. All the Mexican people are scrambling, running and everyone seems to be in a “hurry” and rush going somewhere?.
The overall “atmosphere” doesn’t seem safe. Have to be very observant of your surroundings and watching the people who are looking at you.
That’s not a good feeling when you are in vacation, always watching your back and stay “alert”. Not a relaxed feeling.
Good series, I agree with a lot. Just a note, if AI infrastructure comes in, it will draw heavily on water resources. Power too, but I still have hopes that dedicated solar can be built for it. Knowing how things go, though, I wouldn’t be surprised if there’s a huge drain on power too.
Infrastructure, infrastructure, infrastructure!!! Water is a huge issue! Living in southern Baja, not Cabo, there is so much building going on without providing the necessary infrastructure. In Cabo the massive hotels keep going up and it’s not cheap to stay there, but where’s the water going to come from. Where I live we have to truck our water in that comes from aquifers. What happens when those dry up?
A stimulating series. In addition to the fundamental priorities of significant necessary improvements in public safety, education & infrastructure, Mexico must begin to wean itself off its “branch plant” based manufacturing sectors. In that regard, continuously touting foreign investment is a double-edged sword. For as long as American, Chinese & European owned corporations continue to primarily dominate those sectors within Mexico, Mexico will not control its own economic destiny. The Chinese manufacturing model has been emblematic of how that works. Mexico could not survive as a service-based economy, no matter how diversified within those sectors. Today’s global trade & economic challenges virtually demand that Mexico now enters a period of economic revolution, vs. evolution. Mexico has come a commendably long way since the original initiation of NAFTA, and subsequently the USMCA, but it can clearly no longer depend upon such agreements to support its own future economic growth.
I’ve been providing tourist insurance into Mexico for 30 years. I’ve seen the middle class become stronger and seen growth throughout the country in all areas.
The tourists are still coming to Mexico because they know the country. However, If Mexico wants to increase their tourism business they have to solve the problem of the Elephant in the room. Cartels and drug trafficking.
These problems need to be solved from the top down and I hope these new administrations on both sides are willing to do what is necessary to tackle this problem seriously.
Well, the government to the north needs to address the demand issue. As long as there is demand, Mexico cannot get the supply issue resolved.
And the issue of demand for the US is very complex. Addiction is largely a disease of desperation. Until the US underclass problem is addressed, a product of deindustrialization, declining real wages, loss of hope and belief in the “American Dream” in which every generation expected to do a bit better than their parents did, and the egregious state of addiction and mental health care available… the US won’t get the demand problem under control.
Excellent series Travis. I didn’t want to jump the gun on parts 1 and 2 as a few others, assuming you were referring just to foreigners, but part 3 made it sound so. My belief is that if all of the above are also accessible for Mexican nationals, it’s a great plan. Top two things standing in the way: 1. Security. 2. Education. If those improve, I think Mexico’s potential could skyrocket!
Valid commentary here …. two big elephants in the room. Lack of personal security outside ‘the gates”.
Environmental degradation from new development ignored.
Extreme economic inequality with lacking social safety nets.
Mexico was a nicer place to travel to fifty years ago 🙁
Very good analysis. A few additional points. Overdevelopment, especially catering to Expats and tourists, is already limiting some development. AB&B and other rental platforms must be regulated or there will be both an economic and social backlash like there is ow in Barcelona. Second, water is a problem throughout much of the country, as is wastewater treatment. Plants do get built but they don’t get properly operated or maintained. A perfect example is the Lerma-Santiago river where over 300 treatment plants were built and the pollution is higher than ever because there is no legal control of point-source pollution, estimated by CONAGUA at 4000 points of discharge, the majority of them illegal and uncontrolled. This pollutes groundwater, sickens children, and limits downstream water users like Guadalajara. Until enforcement is a priority there will be no solution to the Mexicans water crises. This will require legal changes, managerial discipline and money – all of which are in short supply. Another critical area you touched on is community integration. It is critical that local government, realtors and the NPO sectors work together to build bi-cultural organizations, events, and relationships. Chapala and Ajijic have made strong strides in this direction, building on the foundation laid down by the visionary woman Neill James 50 years ago. Local organizations like the Lakeside Little Theatre (LLT is the the oldest and largest English-language theater in Mexico), the Lake Chapala Society and other Expat organizations have launched major efforts to offer programs that help integrate with the two communities and to make facilities and assets available to Mexican organizations. One example is Luis Sanchez who was recruited last year for a lead part in LLT’s production of Jesus Christ Superstar, which launched his Mexican musical career – he is now in the Broadway-level production Malinche in Mexico City. Another is the bilingual Semanario Laguna/Lakeside News newspaper and news organization -the only bi-lingual newspaper in Jalisco and only one of 3 in Mexico. Both Mexicans and Expats use it for language instruction and to learn what the other community thinks is important. As you rightly say, more Americans and other Expats will come to Mexico and bring money and skills with them. If Mexico can figure out how to create an integrated tapestry from the immigration, it will do well indeed.