The world is directing capital towards the United States at a pace not seen in years. In a recent column, Citi CEO Jane Fraser highlighted the scale of that shift: the United States’ share of global foreign direct investment has risen from an average of 15% before the pandemic to 20% since 2024. U.S. equity markets now account for nearly 65% of global market capitalization, while close to 90% of global transactions are still conducted in dollars. These figures confirm the United States’ position as the world’s leading destination for capital. But the country’s gravitational pull does not stop at its borders. It increasingly extends to Mexico and Canada, helped in large part by the USMCA. The agreement’s framework enables investment, trade, and production to move across the region with enough confidence and speed for North America to function, in many respects, as a single capital destination.

Citi Institute research offers a useful illustration of this regional dynamic. Trade in goods and services among the United States, Mexico, and Canada reached $1.9 trillion in 2024, almost $400 billion more than when the USMCA entered into force in July 2020. Mexico and Canada are now the United States’ two largest trading partners. The investment data tell a similar story. Between 2020 and 2024, Canadian direct investment in the United States increased by more than 50%, reaching $732.9 billion and making Canada the third-largest foreign investor in the country. At the same time, proprietary data from Citi’s Treasury and Trade Solutions business show that the number of U.S. corporate subsidiaries in Mexico and Canada has continued to rise. Together, the two countries now host the highest concentration of U.S. subsidiaries anywhere in the world.

This does not mean that the United States is simply moving its productive base to its neighbors. U.S. domestic operations have grown strongly during the same period. Data points show a more complex and consequential shift: North America is strengthening its domestic industrial base while also bringing supply chains, investment, and production networks closer to home. In that sense, this is not merely about moving factories from the United States to Mexico or Canada. It is about reallocating activities across the region and reducing exposure to disruption in critical supply chains. Recent shocks have accelerated this process, while competition for critical minerals, the return of industrial policy, and a broader focus on economic security have added further momentum.

The Role of Finance

Investment figures by themselves do not build factories, develop qualified suppliers, or reorganize supply chains. Those outcomes depend on the availability of financing and on the ability of financial institutions to connect large investment projects with the broader productive economy. The USMCA offers an advanced framework for financial-services integration. It reduces certain forms of discrimination and unnecessary cross-border barriers while preserving the ability of each country to regulate its financial system and safeguard financial stability. Yet the three economies are part of this process with very different levels of financial inclusion, private-sector credit, market liquidity, and technological capacity.

The United States combines deep capital markets, a broad institutional-investor base, sophisticated corporate-finance tools, and a currency with a uniquely central role in the global system. Canada brings a resilient banking sector, high levels of financial-services penetration, and large institutional investors, including pension funds, with the capacity to invest at scale in infrastructure, energy, real estate, technology, and global assets. Mexico, for its part, has a well-capitalized banking system and an important presence of international financial institutions. Still, it faces a significant gap in financial access and depth. Credit to the non-financial private sector remains relatively low compared with advanced economies and several Latin American peers.

That gap has practical consequences. A multinational company can finance a new manufacturing facility through its global banking relationships, internal resources, or international capital markets. The small and medium-sized firms that are expected to supply that facility often operate under very different conditions. They may face limited credit access, insufficient collateral, high borrowing costs, informality, limited credit histories, and difficulty meeting the growing requirements associated with traceability, cybersecurity, sustainability, and supplier certification. This is where the region’s opportunity could fall short. Nearshoring can create highly modern industrial hubs, raise exports, and generate local employment. But its broader impact will be limited if those hubs depend mainly on imported inputs, if domestic suppliers lack the financing needed to upgrade and certify their operations, or if governments cannot keep pace with the investment required in roads, ports, border crossings, water, energy, housing, connectivity, and public security.

The key question, then, is not only how much capital North America can attract. It is whether the region can convert that capital into stronger productive linkages, innovation, formal employment, and durable growth. The number of investment announcements matters, but the quality of investment matters even more. There is a meaningful difference between attracting an isolated facility and building an ecosystem that includes local suppliers, design and engineering centers, advanced logistics, digital services, specialized financing, and skilled workers.

The financial system can help close that gap. Commercial banks are central to providing working capital, trade finance, factoring, leasing, and risk-management tools. Capital markets can support the long-term investments needed in infrastructure, clean energy, industrial real estate, data centers, transportation, and productive capacity. Insurers can help businesses manage physical, logistical, cyber, and climate-related risks. Fintech companies can lower the cost of serving smaller businesses, facilitate cross-border payments, improve credit assessments, and broaden access to cash-management and financing tools.

The USMCA can make this process easier, but its full potential will depend on complementary national policies and coordinated regional action. That requires a synchronized regional competitiveness agenda that combines supplier finance, credit guarantees, technical assistance, common standards, stronger commitments to ensure the free flow of cross-border data, and targeted investment in infrastructure, energy, connectivity, and border efficiency. This agenda would help small and medium-sized firms integrate into North American value chains, lower the cost and risk of cross-border investment, and turn the region’s capital advantage into stronger local capabilities, more resilient supply chains, and broader prosperity.

-

Sources:

Citi Global Perspectives & Solutions. "Supply Chain Financing: Durable Global Trade in the Age of AI." Citi Institute, February 2026.

Citi Global Perspectives & Solutions. "The Enduring Power of Three: U.S.-Mexico-Canada Agreement." Citi Institute, January 2026.

Fraser, Jane. "Why the World Is Still Investing in America." TIME, August 13, 2026. https://time.com/article/2026/08/13/the-world-is-still-choosing-america/

Bank for International Settlements. Annual Economic Report 2026. Basel: BIS, June 2026. https://www.bis.org/publ/arpdf/ar2026e.htm

United Nations Conference on Trade and Development (UNCTAD). "Africa Is Attracting Investment in Strategic Industries. The Challenge Is Turning It into Broader Industrial Development." Press Release UNCTAD/PRESS/PR/2026/006, World Investment Report 2026, Geneva, July 7, 2026.

Devesa, Tiago, Jeongmin Seong, Olivia White, Nick Leung, Michael Birshan, Jan Mischke, Camillo Lamanna, and Masud Ally. "The FDI Shake-Up: How Foreign Direct Investment Today May Shape Industry and Trade Tomorrow." McKinsey Global Institute, September 2025.