Playing offense in an uncertain 2026
Dear EDC investors and partners,
For those who joined us at board meeting in January to hear EDC VP Eduardo Velasquez present, one message was clear: Our regional economy is entering a period not simply of slowdown or acceleration—but of structural change.
The global economy is being rewired in real time. Trade relationships are being reassessed. Supply chains are shifting. Capital is flowing more selectively. And uncertainty—particularly around tariffs, court proceedings, and the upcoming 2026 U.S.-Mexico-Canada Agreement (USMCA) joint review—has become a defining feature of the landscape.
Here at home, the innovation drivers powering San Diego’s growth for more than a decade are beginning to show signs of strain. This is unfolding amid a more protectionist national posture, higher costs of capital, heightened geopolitical tension and wartime, and rapid advances in artificial intelligence that could reshape industries almost overnight.
Just last month, the Supreme Court struck down the use of the International Emergency Economic Powers Act (IEEPA) as justification for broad-based tariffs imposed over the past year. The ruling reaffirmed that sweeping tariff authority rests with Congress, not the executive branch. While tariffs are not eliminated outright, the decision introduces further uncertainty around their continuation and potential reimbursement of duties already paid. For companies on the ground, the message is clear: Trade policy remains fluid.
Time and again, we hear from businesses like yours that uncertainty—more than any single policy—is the primary concern of 2026.
The proof is in the data
Periods of trade volatility are not new. In 2018, amid similar tensions, EDC and WTCSD commissioned our North American Trade & Competitiveness Study to better understand the cross-border economy defining the Cali Baja region and to equip leaders with credible data.
Last November, we refreshed that work with the release of our Binational Trade & Competitiveness Report—a comprehensive assessment of the economic engine powering our region.
The findings are clear. Nearly 95,000 regional jobs are supported by binational trade. Since the USMCA took effect in 2020, trade with North American partners has grown by nearly one-third and continues moving up the value chain into sectors such as medical devices, aerospace, and semiconductors. Ninety-seven percent of San Diego’s goods exports go to Mexico alone, underscoring the deeply integrated nature of our intermediate goods trade. Meanwhile, services exports have risen 54 percent in recent years.
Trade is not a side story—it is the bloodstream of our innovation ecosystem.
Building on this foundation, we are now refreshing our Go Global: Trade & Investment Plan, the framework that launched WTCSD more than a decade ago. In partnership with Boston Consulting Group and regional stakeholders, we will conduct new analysis and executive engagement to ensure our roadmap through 2030 reflects today’s global realities. We invite you to join this initiative and consider sponsoring the upcoming report.
MetroConnect: Building resilience where it matters
While we focus on long-term positioning, we remain committed to near-term resilience. Our small and mid-sized businesses must be ready.
Last month, we welcomed 15 companies into MetroConnect VIII, our flagship international sales accelerator. Replicated across North America and recognized with a Presidential “E” Award in 2023, the program provides structured export training and more than 200 hours of no-cost expert consulting support through our role as the region’s official Export SBDC.
Competitiveness is built not in calm moments, but through preparation and deliberate action.
Japan 2026: Playing offense
As we take on 2026, we intend to play offense.
Asia now accounts for roughly half of global foreign direct investment flows. Within that trend, Japan stands out as the largest foreign investor in the U.S. and, over the past decade, the top foreign investor in San Diego County. Prime Minister Sanae Takaichi has pledged $550 billion in new U.S.-bound investment in the coming years, emphasizing defense, energy, and security—sectors where San Diego holds distinct strengths.
This fall, WTCSD will lead a delegation of approximately 35 business leaders to Tokyo, Yokohama, and Osaka. These trade missions are not symbolic; they are strategic.
We annually position San Diego as a premier landing zone for investment, engage senior government and corporate leaders, and align our region with the next wave of trusted global capital flows. In a world where reliability increasingly defines opportunity, Japan is a natural partner—and San Diego is a natural platform.
Looking ahead
We are entering 2026 with clear priorities: Strengthen our competitive advantages, deepen trusted global partnerships, and convert regional strengths into global relevance. The next era of globalization will be more selective, and more strategic. Regions that prepare early and act deliberately will outperform those that wait for certainty to return.
We invite you to engage—whether by supporting MetroConnect companies, joining us for an upcoming Global Competitiveness Council meeting, maximizing opportunity for our Japan trade mission, or contributing to our refreshed global strategy. Together, we can ensure that San Diego not only weathers the storms ahead, but emerges stronger, more globally connected, and more competitive than ever.
Lucas Coleman
Director, World Trade Center San Diego
