Industrial Policy & Trade Monitor· 2667 actions· ✨ 89 recent

On 21 January 2025, Mexico published the Decree granting tax incentives in support of the national strategy known as "Plan Mexico" in the Diario Oficial de la Federación (DOF). The decree provides MXN 30 billion (~USD 1.5 billion) in fiscal incentives through 2030 to attract nearshoring investment, with MXN 28.5 billion allocated to immediate deductions on new fixed asset investments and MXN 1.5 billion for workforce training and innovation. Deduction rates range from 35% to 91% depending on asset type and sector, with the automotive, aerospace, and semiconductor industries expected to benefit most. The measure aims to capitalize on US-China decoupling by positioning Mexico as an alternative manufacturing base for supply chains serving the North American market.

The Inflation Reduction Act (Public Law 117-169), signed by President Biden on 16 August 2022, contains the largest single package of clean-energy and clean-manufacturing subsidies in US history — Congressional Budget Office scored the energy and climate provisions at $369B over 10 years, with subsequent Treasury / academic estimates reaching $800B-$1.2T as uptake exceeded baseline. Core mechanisms include the Section 30D Clean Vehicle credit ($7,500 per qualifying EV), the Section 45X Advanced Manufacturing Production Credit (per-unit credits for domestically-produced battery cells, modules, electrodes, and critical-mineral processing), the Section 48E Clean Electricity Investment Credit, and the Section 45V Clean Hydrogen Production Credit. Critically, the law contains Foreign Entity of Concern (FEOC) provisions barring credit eligibility for vehicles or components linked to entities controlled by China, Russia, Iran, or North Korea.