Bob Fraser and Ben discuss $1 trillion in annual investment reshaping U.S. supply chains toward nearshoring and reshoring. Federal policy is driving capital into semiconductors, medical devices, and petrochemicals, moving production to Mexico, Canada, or inland America. The I-35 corridor from Mexico through the U.S. to Canada is becoming the new economic spine.
In terms of investment, the changes in policy at the federal level have encouraged foreign investment in the United States in semiconductors, in even transportation logistics. And despite all that news on tariffs, there is a dynamism down there because companies are gearing up for more growth, for nearshoring. They've got to cross the border and they've got to keep going from here. And this includes medical devices, all the other logistic technology, liquid liquid natural gas, the building out of ports down there for the petrochemicals. So we're looking at where those investments are coming, what are the pieces that are moving around, and what does that shortened supply chain look like, and who are the pieces in that, that particular chain, and, you know, who's trading.
Yeah, I, I think she's calling out a, uh, a fantastic trend. You know, I've talked a lot about consumer spending, which is 70% of the economy, and she's calling out kind of a lesser component but still a very, very large component, and that is investment spending. And specifically, the nearshoring and reshoring trend where a lot of US companies, importers, manufacturers are reconfiguring their supply chains, de-risking the supply chains to bring everything closer to America. That's nearshoring, means moving it to Canada or Mexico, and reshoring moves it on to America. And a lot of it is a mix of nearshoring and reshoring. But the numbers are nutty, right? You know, I've seen numbers saying that the spending is something like $1 trillion a year. Well, that $1 trillion a year boosts the economy. So somebody is spending that stuff, and that means somebody is supplying it, and that means that there's just an economic boost.
I mean, this is a megatrend that we've been talking about for a long time. You know, she said there's a lot of fear with the tariffs and all of our trade relationships and just with, you know, the policy of the administration to be very stubborn in that. But the data is showing a very different story. Where the investment in Mexico and other kind of trade relationships, it's really shifting the whole landscape of the supply chain, right? And it's shifting the focus from these coastal import markets to more the central corridor in the I-35 interstate that goes north to south from Mexico all the way to Canada. This is something we've been really focusing on over the past few years. And we were actually just down in El Paso a few months ago. And it's remarkable just to see and feel what's happening with boots on the ground and seeing the investment and the decisions that are being made. And again, these are decisions that are going to be made over— they're going to impact the companies for the next 10, 20 years. And so, yeah, maybe there's some short-term tariff pressure, but that's not going to massively change the decisions that they're making, these billion-dollar decisions over the next 2 decades. So I think that's a force that is— you want to get on the right side of that tidal wave.
