Trump Returns to the White House: How Will His Administration Impact Venture Capital in Mexico?

We analyze the various scenarios that may arise in venture capital following Trump’s victory, how venture capital investments could change, and which startups might benefit.

Written by Salvador Neme

Donald Trump’s return to the White House in 2025 as President of the United States is expected to significantly impact the venture capital ecosystem in Mexico, creating challenges and opportunities shaped by the US-Mexico-Canada Agreement (USMCA), strengthened economic ties, and the trend of nearshoring.

Key sectors such as manufacturing, logistics, fintech, and agtech could see growth driven by the changing market needs and policy adjustments anticipated during Trump’s term. However, Mexican startups and investors will need to navigate uncertainty and diversify their funding sources or markets as Mexico and the United States redefine their political and commercial relationship.

Changing Dynamics in US-Mexico Relations

Although Trump’s action plan remains unclear, it is crucial to examine potential scenarios that may emerge from his announced initiatives and how future decisions could influence the startup and venture capital ecosystem.

• On the USMCA: While the USMCA is a well-established agreement, Trump has indicated plans for modifications. However, aggressive changes are unlikely due to their potential negative impact on existing trade relations, especially since Mexico is now the United States’ primary trading partner, surpassing both China and Canada. The USMCA serves as a framework for future trade relations.
• Economic Interdependence: The economic ties between the United States and Mexico are strong, with Mexico currently being the top trading partner of the U.S. This interdependence may mitigate some of Trump’s more aggressive policy measures.
• Nearshoring Trend: Disruptions in global supply chains have accelerated nearshoring trends in Mexico. Companies worldwide are increasingly looking to relocate production closer to the U.S., presenting Mexico with opportunities to attract more foreign direct investment, particularly as competition with China intensifies.

The Road Ahead

As Mexico’s venture capital ecosystem adapts to the implications of Trump’s presidency,

several scenarios are likely to unfold:

1. Investor Uncertainty: Initial market volatility and political uncertainty may lead to a temporary slowdown in venture capital activity as investors adopt a “wait-and-see” approach.

2. Market Focus: With potential trade barriers under the USMCA, startups may need to expand into other American markets or develop more resilient business models with diverse revenue streams that do not solely rely on the U.S. market.

3. Immigration Policies: U.S. immigration policies could drive skilled workers and entrepreneurs back to Mexico, strengthening the local startup ecosystem.

4. Cross-Border Collaboration: Despite governmental uncertainties, increased economic cooperation could emerge between U.S. and Mexican companies through technology exchange and market access.

5. Regional Hub Potential: With its strategic location and substantial internal market, Mexico is well-positioned to become a startup hub for entrepreneurs and investors across Latin America.

6. Funding Sources Diversification: Mexican startups might seek funding beyond the U.S.-based venture capital by attracting domestic, European, or Asian investors.

7. Government Initiatives: Under Claudia Sheinbaum’s leadership, the Mexican administration could develop new policies aimed at fostering startup growth and attracting foreign investment through strategies like tax incentives and regulatory changes.

Opportunities for Startups and VC

Despite existing uncertainties, four sectors stand out as potentially benefiting from increased startup development and investment attraction:

1. Manufacturing and Logistics: Trump’s support for revitalizing U.S. manufacturing could positively affect Mexico’s robust industry, opening doors for startups focused on innovative technologies that enhance trade within Mexico and Latin America.

2. Fintech: Economic uncertainty may lead to currency fluctuations and changes in remittance processes, prompting Mexican fintech companies to develop solutions for cross-border payments, online banking, and financial inclusion tools.

3. Agtech: Given Trump’s agricultural policies and potential trade tensions, there are opportunities for Mexican agtech startups addressing food security challenges, sustainable agriculture practices, and agricultural products.

4. E-commerce and Last-Mile Delivery: As trade patterns evolve with increased goods exchange, e-commerce businesses could experience growth alongside last-mile delivery services.

Looking ahead optimistically, we can anticipate greater government support for Mexican startups, enhanced cross-border business collaboration, a focus on building resilient business models, consolidation of Mexico as a regional startup hub, and accelerated growth in e-commerce, logistics, digital payments, and manufacturing startups.

The ability of Mexico’s venture capital ecosystem to adapt to these changes will be critical. By leveraging its strengths and seizing emerging opportunities, this ecosystem can emerge stronger and more competitive globally despite challenges posed by evolving U.S.-Mexico relations.