The podcast of EGADE Business School and the Undergraduate Business School of Tecnológico de Monterrey is available on Spotify, Amazon Music, Apple Podcasts and YouTube Music.
By JOSÉ ÁNGEL DE LA PAZ | EGADE BUSINESS SCHOOL
The ninth season of the Territorio Negocios podcast started on August 6 with the episode "Tesla Pause: Domino Effect?".
Led by Eduardo Aguiñaga, director of Full-Time programs at EGADE Business School, episode 167 featured Jesús Garza, professor of Economics and Finance at EGADE Business School, who offered a vision of the implications of the project pause.
Elon Musk, Tesla's CEO, announced the pause of the gigafactory project in Nuevo Leon, valued at around 5 billion US dollars. This decision resulted from the uncertainty generated by the upcoming elections in the United States and Donald Trump's protectionist rhetoric, which has promised to increase tariffs on imported products.
Garza stated that the wait for Tesla reflects how politics can affect crucial business decisions.
The economist emphasized that Trump's proposed protectionism is nothing new and has already had implications in the past, such as the renegotiation of the North American Free Trade Agreement (NAFTA).
According to Garza, if Trump implements these policies again, production costs could increase, and competitiveness could fall in countries such as Mexico.
"Obviously, if this materializes, as Elon Musk rightly said, then there would be no point in foraying into other countries where cheap labor is what will make you competitive," he said.
Mexico is facing internal challenges that affect its attractiveness for foreign investment, such as an insufficient electrical power capacity, a lack of water resources, and the low availability of qualified human capital, as just 22% of the population holds at least a bachelor’s degree.
The academic also discussed nearshoring, warning that although this phenomenon aims to bring production chains closer to key markets such as the United States, due to structural problems, the bulk of foreign direct investment in Mexico is reinvestment rather than new investment.
Finally, Garza underscored that Mexico must take better advantage of the Agreement between Mexico, the United States of America, and Canada (USMCA) to diversify its exports beyond the manufacturing sector by supporting small and medium-sized enterprises and the service and technology sectors.
"A huge area of opportunities for all SMEs, as well as for service and technology companies, would be to go and offer our products in the United States. To do this, I believe that the local, municipal, state, and national government should support us in seeking opportunities to grow our integration," Garza said.
The episode ended with a reflection on Tesla’s decision, which reminds us of the need to strengthen Mexico’s internal economic policy to attract and retain investments in a competitive, volatile global economy.
You can listen to this and other Business Territory episodes on Spotify, Amazon Music, Apple Podcasts, and YouTube Music.