AI hardware demand raises Mexico tech exports before USMCA talks

Demand for artificial intelligence infrastructure in the United States has increased Mexican technology exports, adding complexity to President Donald Trump's trade goals before talks to update the USMCA free trade agreement with Mexico and Canada.

The talks were due to begin on 21 July in Mexico City. Trump, who campaigned on increasing manufacturing in the United States, wants to reduce the trade deficit with Mexico. But exports of computer equipment from Mexico to the United States have risen sharply.

AFP calculations cited in the report found that, between January and April, Mexico tripled its sales of computer equipment to the United States compared with the same period a year earlier. The exports were worth more than $50 billion, compared with $2.2 billion in imports. The sector now accounts for 30 percent of Mexican products shipped to the United States and has overtaken the automotive industry as the largest export category.

Diego Flores, head of electronic and digital industries at Mexico's Economy Ministry, said the change was largely driven by demand for advanced AI electronics. The sector includes processing units and data centre hardware, but it is not formally on the agenda for this round of negotiations.

The report said server racks that hold AI processing cards are among the most demanded products, as data centres expand across the United States. Flores said the main export centre is Jalisco, where global technology companies and startups operate.

Taiwanese company Foxconn assembles server racks in Jalisco and works as a strategic partner to US chip designer Nvidia. In March, Foxconn announced $137 million in investments across two Mexican subsidiaries after estimating that its production could double this year. Chief executive Michael Chiang said the United States and Mexico would remain the company's main production hubs, and said Foxconn would invest 30 percent more than in 2025 to expand AI-related capacity.

Flores said another manufacturer in Jalisco, Flextronics, had used parking lots to expand manufacturing capacity because of strong demand.

The expansion comes during a tense trade period. The Trump administration rejected a 16-year extension of the USMCA and chose annual reviews with Mexico and Canada instead. Washington is also pressing for more domestic manufacturing, while US demand for AI infrastructure depends partly on imports from Mexico, Taiwan and China.

Flores said nobody could be sure whether the sector would become a tariff target, but he said its strategic value to the United States could help it avoid protectionist measures.

William Jackson, chief emerging markets economist at Capital Economics, said Washington was also seeking to limit the use of Asian technology in North America. He said the administration had to balance demand for these technologies with the goal of staying at the front of AI development, and said tariffs could work against that goal. He also warned that the sector could be exposed to tariff pressure because Mexican manufacturers use components from China and Taiwan, which Trump could view as a backdoor route for Asian technology into the United States.