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Foreign Direct Investment (FDI) is when investors from one country put money into business operations in another country. It often involves more than just putting in capital; it may also include management, technology, and expertise. This type of investment is important because it can lead to job creation,
boosts in productivity, and access to new markets. When a country like Mexico experiences high levels of FDI from the U.S., it benefits from new jobs and advanced technology from these investments.
But FDI can be a double-edged sword. If trade relationships between two countries become strained, as was the concern with the U.S. and Mexico in 2017, new investments may slow down. Investors might hesitate,
or they could even withdraw their investments looking for more stable or promising environments elsewhere. This fluctuation can lead to instability in the job market where certain sectors may suffer more than others,
undermining economic confidence and potentially stunting overall economic growth.

Economic growth refers to the increase in the production of economic goods and services from one period to another. It is measured by the increase in Gross Domestic Product (GDP) and is usually driven by improvements in productivity, technological advancements, and increases in physical and human capital.

• Productivity: More output can be produced with the same amount of input.
• Technological Advancements: New technologies can make processes more efficient.
• Capital: Financial, physical, and human capital investments drive increased production.

In the context of Mexico in 2017, consistent economic growth was remarkable despite potential troubles in trade and investment.
Growth is crucial for the economy as it leads to higher income levels, better living standards, and improved economic stability. Yet, such growth is heavily reliant on interactions with other countries,
especially through exports and foreign investments. If these are threatened, as with Mexico's situation with the U.S., the risks to continued growth can be significant.

Geopolitical context examines how geographic and political factors influence international trade relations. For Mexico, its geographic proximity to the United States makes their economic relationship highly significant. Such proximity facilitates easy trade exchanges and border operations,
supporting robust economic interactions. However, geopolitical tensions can affect these relations. In 2017, there were concerns about potential policy changes in the U.S., which could pose challenges for trade agreements like NAFTA. Changes in policies or political climates can lead to uncertainties,
impacting businesses and investor confidence. This context focuses on the delicate balance between maintaining strong trade partnerships while navigating political landscapes. Developing strategies to mitigate geopolitical risks, such as diversifying trade partners or investing in national industries, can be vital for countries like Mexico to ensure sustained economic interactions and growth. Stability in these international relations is essential for maintaining healthy trade flows and investments.