How speed is driving foreign direct investment in the South
Key points:
- • Global manufacturers are now weighing supply chain efficiency and proximity to customers when choosing U.S. locations.
- • San Antonio and Houston are turning their position on the U.S.-Mexico corridor into a competitive edge.
- • Secondary markets such as the Research Triangle and Jacksonville are winning international projects.
October 2026 — Toyota’s $3.6 billion expansion in the San Antonio region, which will create 2,000 jobs, shows where foreign direct investment is heading: closer to U.S. customers and closer to Mexico. Tariff uncertainty and fragile supply chains have changed how global manufacturers pick locations, and regions from Houston to Raleigh-Durham are now competing on proximity, speed, and certainty.
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Stella Chen, tax partner at Aprio, sees the shift in her client list. Aprio runs dedicated Chinese, Korean, Japanese, German, and Latin American teams, and more than 60 languages are represented on its staff.
“In the past, the model was to manufacture in Asia and ship products to the United States,” Chen said in an interview with Invest: Raleigh-Durham. “That will continue to some extent, but many companies now recognize the uncertainty associated with supply chains, logistics, shipping, and tariffs. As a result, they are moving part of their operations to Mexico or the United States.”
Incentives alone, however, no longer close the deal. “The biggest trend is that companies are not only looking at incentives. They are also evaluating how efficiently their business can operate with the right supply chain and workforce,” Chen said.
Proximity becomes strategy
For those regions looking to attract re-shoring or nearshoring companies, it is a matter of highlighting advantages. San Antonio, for example, is turning its position on the border into a selling point. “Among the nation’s 50 largest metros, San Antonio led the country in manufacturing job growth over the past five years,” said Romanita Matta-Barrera, chief impact officer of the greater:SATX Regional Economic Partnership, in an interview with Invest: San Antonio.
“Many companies operating here depend on supply chains in Mexico, and proximity to those supply chains remains one of San Antonio’s competitive advantages,” she said. “Companies such as International Motors and JCB considered connectivity an important factor in choosing the region.”
The pipeline continues to grow. “We also have another 3,600 jobs in the pipeline, representing approximately $1 billion in capital investment this year,” Matta-Barrera added.
John Beckham, managing director of the North American Development Bank, also sees the city’s geography as its biggest asset. “San Antonio sits at the top of a triangle formed by San Antonio, Houston, and Monterrey (Mexico), which is a major hub of energy and manufacturing capacity,” he told Invest: San Antonio.
The border’s physical capacity, Beckham added, lags behind that promise, highlighting the challenges some regions can face. Truck crossings between the two countries grew from about 3 million to nearly 13 million after NAFTA took effect in 1994.
“Roughly 75% of the infrastructure supporting those crossings predates 1994. The physical infrastructure has not kept pace with traffic volumes,” Beckham said.
Investors are also watching trade policy closely. “The review of the USMCA is clearly on the agenda, and private investors are watching it closely because it provides certainty around the trade relationship,” Beckham said.
Private operators are filling in some of the gaps. Monterrey Metal Recycling Solutions runs Monterrey Transloading Solutions inside a Foreign Trade Zone at Port San Antonio, which gives companies on both sides of the border access to rail, storage, and distribution. “As manufacturing moves closer to San Antonio, we recognize the need to continue investing in our infrastructure and collection logistics so we can better serve our manufacturing partners,” said Jordan Vexler, CEO of Monterrey Metal Recycling Solution, in an interview with Invest: San Antonio.
Houston is also taking advantage of its proximity to Mexico. “We are seeing foreign-based companies entering Texas and choosing Houston as their base of operations,” Ricardo Garcia-Moreno, managing partner of the Houston office of Haynes Boone, told Invest: Houston. “Texas as a whole is open for business.”
The cross-border deal flow runs both ways. “Texas is Mexico’s leading trading partner, and our proximity to the border naturally creates significant opportunities. We are seeing a high level of M&A activity, both from Mexican companies investing in the United States to diversify their offerings and from U.S.-based companies operating in or expanding into Mexico,” Garcia-Moreno said.
Lesser-known markets rise
It’s not just the coasts attracting foreign direct investment. “Traditionally, international companies think of California, New York, Massachusetts, or Illinois when considering U.S. markets because those are the places they know,” said Ryan Combs, executive director of the Research Triangle Regional Partnership, in an interview with Invest: Raleigh-Durham. “The word is getting out that this is a great place to do business.”
North Carolina backs that message with policy. “The corporate tax rate has fallen from 7.5% to its current 2%, and it is projected to reach zero by 2030,” Combs said. New international air routes to Reykjavik, Frankfurt, and Dublin add to the case. “Companies want to locate where they have direct flights to customers and headquarters,” he said.
Awareness remains the hurdle. “When companies visit North Carolina, they are often impressed by the opportunities and the business-friendly environment. The challenge is getting them here in the first place,” added Aprio’s Chen.
Speed decides the deal
Once a company commits, time becomes the constraint. “Many counties are building speculative buildings because companies need availability now, while a large industrial building can take 18 to 20 months to complete,” Combs said. “By the time these buildings are completed, they are often already leased because speed to market is so important.”
Jacksonville competes the same way. JAXUSA Partnership announced 12 projects in 2025, which are expected to bring more than 2,400 jobs and nearly $1 billion in capital investment. “We conduct international business development missions at least once a quarter, focusing on Europe, the U.K., South America, and Central America,” said Aundra Wallace, president of JAXUSA Partnership, in an interview with Invest: Jacksonville.
Asked what closes the deal, Wallace pointed to speed and certainty. “Time is money, and we want to make sure we can bring quick decisions to companies so they can make a decision about Jacksonville.”
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