Mexico economy chief suggests possible tariff retaliation against US
Ebrard made the comments in an interview with local broadcaster Radio Formula, in which he reflected on how President-elect Donald Trump threatened 25% tariffs on Mexican goods during his previous term in office at a time when the Republican leader sought concessions from Mexico’s government on immigration enforcement.
“If you put 25% tariffs on me, I have to react with tariffs,” said Ebrard, who served as Mexico’s foreign minister during the previous incident.
“If you apply tariffs, we’ll have to apply tariffs. And what does that bring you? A gigantic cost for the North American economy,” he added.
Besides the tariffs Trump has promised to impose on Mexico, there’s also the issue of Trump’s plans to conduct mass deportations of migrants which could, in sum, lead the Latin American country to a recession, according to analysts.
On Monday, Sheinbaum herself shed a light on another issues that could prove to be consequential for her administration as Trump assumes office: remittances. Sheinbaum expressed caution during a morning press conference, as reported by La Opinión:
“We hope there will be no impact (on remittances), and we are preparing to hold these preliminary meetings. We are also working on issues related to economic relations, migration, security, and other high-level matters that we need to address, if possible, in a meeting before President Trump arrives.”
Analysts worry that deportations could disrupt this crucial income source, especially as around half of the 11 million undocumented immigrants in the U.S. are Mexican nationals.
Sheinbaum also took the opportunity to advise Mexican nationals in the United States to seek support from local consulates amid concerns about Trump’s recent appointments of key figures associated with past immigration enforcement including Tom Homan, former head of Immigration and Customs Enforcement (ICE), who has already suggested “self-deportations” and workplace raids would be part of his policies once in charge.
In response to Trump’s campaign focus on border migration control, Sheinbaum and her Foreign Minister Juan Ramon de la Fuente have emphasized the administration’s commitment to a “humanitarian” approach that would give continuity to former President Andrés Manuel López Obrador’s policies. “What we are looking for is not only the containment of migration in the south, but also that there can be employment,” added Sheinbaum.
Canada, U.S. should eye own trade deal if no Mexican tariffs on China
Ontario Premier Doug Ford on Tuesday suggested Mexico “shouldn’t have a seat at the table” in upcoming North American free trade talks if it doesn’t match Canadian and American tariffs on Chinese imports — and that Canada and the U.S. should focus on a new, bilateral deal instead.
Ford’s statement comes as North America braces for the return of U.S. president-elect Donald Trump to the White House and a scheduled review in 2026 of the Canada-United States-Mexico Agreement (CUSMA), which replaced NAFTA during Trump’s first term.
Trump, and now Ford, have accused Mexico of allowing Chinese companies to bypass CUSMA rules and export vehicles and parts into the U.S. and Canada through Mexican-built manufacturing plants.
“If Mexico won’t fight transshipment by, at the very least, matching Canadian and American tariffs on Chinese imports, they shouldn’t have a seat at the table or enjoy access to the largest economy in the world,” Ford said in the statement issued by his office.
“Instead, we must prioritize the closest economic partnership on earth by directly negotiating a bilateral U.S.-Canada free trade agreement that puts U.S. and Canadian workers first.”
Canada joined the U.S. earlier this year in slapping 100 per cent tariffs on Chinese imported electric vehicles and 25 per cent levies on Chinese steel and aluminum. Ottawa is undergoing further consultations on whether to expand the tariffs to other Chinese imports. Mexico has not followed suit.
Chinese automakers such as BYD — one of the largest in the world — are seeking to build manufacturing plants in Mexico, where a number of American companies are already building their vehicles at a lower cost. The fear is that those Chinese companies can then take advantage of CUSMA’s duty-free import rules and flood the North American market with Chinese cars while avoiding the U.S. and Canadian tariffs.
CUSMA’s rules of origin clause requires higher levels of North American parts in vehicles sold in the three countries compared with NAFTA, which Trump has said China is also trying to exploit.
Speaking to reporters at an unrelated press conference in Barrie on Tuesday, Ford expanded on his statement and pointed to a trade imbalance between Ontario and Mexico, which he claimed exports the vast majority of $40 billion in annual two-way trade with his province.
“If Mexico wants a bilateral trade deal with Canada, God bless them,” Ford said. “But I’m not going to be drawn down with these cheap imports, taking men and women’s jobs from hard-working Ontarians.”
“We’re going to continue to work with partners like the United States, and hopefully Mexico as well, to make sure that we are united in our desire to protect good jobs” as well as environmental and labour concerns, he said.
Canada has sought to follow the Americans’ lead on trade issues when it comes to China, particularly Chinese EVs. Last week, Deputy Prime Minister and Finance Minister Chrystia Freeland said that unified stance will give Canada a “firm foundation” in upcoming U.S. trade negotiations.
It could also help make the case for Canada to avoid Trump’s promise of a blanket 10 per cent tariff on all foreign imports to the U.S.
Trump has taken aim at Mexican imports in particular over the Chinese auto issue, as well as immigration. At a rally in North Carolina earlier this month, Trump said he will impose a 25 per cent tariff on everything imported from Mexico “if they don’t stop this onslaught of criminals and drugs coming into our country.”
Mexico’s Economy Minister Marcelo Ebrard suggested on Monday that the Mexican government would “have to” retaliate with its own tariffs on American goods if Trump follows through, which he said would bring “a gigantic cost for the North American economy.”
Last month, Trump vowed to impose tariffs of at least 200 per cent or more on all vehicles imported from Mexico — which would hurt American automakers in the short term — and said he could levy Chinese companies who operate in Mexico and bypass CUSMA rules as high as 1,000 per cent.
Trump would likely not need Congress to impose these tariffs, as was clear in 2018, when he imposed them on steel and aluminum imports from Canada and other countries without going through lawmakers by citing Section 232 of the Trade Expansion Act of 1962. That law, according to the Congressional Research Service, gives a president the power to adjust tariffs on imports that could affect U.S. national security, an argument Trump has made.
Much of Trump’s ire toward CUSMA has been focused on protecting the American auto industry and ensuring China can’t exploit its rules of origin clause and benefits for North American imports.
But Mexico could further threaten its place within CUSMA if Mexican President Claudia Sheinbaum pushes through her predecessor Andrés Manuel López Obrador’s policies aimed at eliminating independent regulatory and oversight bodies, and laws the U.S. government says could reduce the independence of the judiciary — both of which are required under the trade agreement.
López Obrador paused relations with the U.S. and Canadian embassies in Mexico after both countries criticized the judicial reforms.
Mexico president lashes out at supreme court amid looming constitutional crisis
Sheinbaum accuses court of overstepping as it prepares to vote on reform that makes almost all judges elected by vote
Mexican president Claudia Sheinbaum has accused the country’s supreme court of overstepping its functions and “trying to change what the people of Mexico decided” as it prepares to discuss whether to strike down parts of a transformative judicial reform.
The move would shift Mexico to a system where almost all of its judges, including the supreme court, are elected by popular vote.
No other country in the world has such a system. The US elects judges at the lower level, while Bolivia elects 26 judges across its top courts. But in Mexico, thousands of positions at all levels would be put to the vote.
Proponents say the reform is needed to root out corruption in the judicial system. Opponents say it will do little to address corruption, but will hand the ruling Morena party control of the courts, while giving organised crime groups another chance to impose their candidates in elections.
“It has to be made very clear that eight justices cannot be above the people,” Sheinbaum told reporters on Monday.
Morena already has a level of political power not seen for decades in Mexico, after its landslide election victory in June gave it a supermajority in Congress and control of enough state legislatures to change the constitution at will.
It has passed a whirl of amendments since, including the judicial reform in September.
The judicial system itself has come out strongly against the reform, with strikes and protests. Though three members of the supreme court have said they support the reform, the other eight showed their resistance by declaring they would not run in the elections scheduled for August 2025.
Now the court will discuss whether the judicial reform violates existing precepts in the constitution in a last-ditch effort to stop it moving forwards.
This has already prompted the legislative to pass another amendment last week that blocks the court from reviewing legal challenges to any constitutional reforms, potentially nullifying any decision that the court takes.
That means if the supreme court does vote against the judicial reform, Mexico will be in uncharted territory. And Sheinbaum will have to decide whether to ignore or comply with the ruling.
“This will lead to a constitutional crisis of a kind we have not seen for the duration of the 1917 constitution,” Olvera Rangel told Proceso, a Mexican magazine.
The dispute has dominated the agenda during Sheinbaum’s first month in government, sucking attention away from other issues such as the expansion of social programs, the further militarisation of public security, and the rising violence in states such as Sinaloa and Chiapas.
It has also spooked markets, leading the peso to depreciate more than 15% against the dollar, and drawn rare public criticism from the US, Mexico’s largest trade partner, which said it jeopardised democracy and rule of the law in the country.
To defuse the crisis, one supreme court judge, Juan Luis González Alcántara, has suggested a compromise: that the top courts stand for election, but the thousands of other judges do not.
But it is unclear whether the other judges on the supreme court would agree to this, let alone Sheinbaum and her party.
Sheinbaum inherited the judicial reform from former president Andrés Manuel López Obrador, who founded Morena and was frustrated when the courts blocked some of his key policies.
Even if Sheinbaum was inclined to negotiate with the supreme court, she could face resistance from power brokers within Morena.
In any case, she has showed no signs of backing down, accusing the court of being a political actor and violating the constitution itself.
On Monday she added that her government has a plan in case the court goes against the judicial reform: “We are prepared, whichever way they vote.”
Mexico said in its own statement that the measure would provide greater reliability and predictability in water allocations to users in both countries, establish new working groups and improve water quality in the Rio Grande basin.
The new measure was the result of 18 months of negotiation, the IBWC said.
Mexico and the United States will establish working groups to “develop water conservation for the benefit of both countries,” the IBWC said.
Mexico to stick with policies aimed at stopping migrants after Trump win
Mexico will continue pursuing measures to stop migrants from reaching its northern border with the United States, its top diplomat said on Friday, days after Donald Trump won the U.S. presidential election vowing a new crackdown on illegal immigration.
Foreign Minister Juan Ramon de la Fuente stressed that Mexico’s model is working and will stay in place, pointing to data that shows the number of migrants caught by U.S. authorities at the border had fallen 76% since last December.”It’s working well and we’re going to continue on this path,” he told a press conference.
“He raised the issue of the border… and I told him, ‘Yes, there is the issue of the border, but there will be space to talk about it,'” said Sheinbaum, who described the conversation as “very cordial.”
Much like he did in his previous term as president, Trump has threatened to slap 25% tariffs on all Mexican exports unless its government stops migrants and drugs from crossing the shared border.
Mexico is extraordinarily reliant on the U.S. market, which is the destination of around 80% of its exports.
Since the beginning of this year, Mexico has quietly carried out a crackdown on migrants seeking entry into the United States, including a growing program to bus and fly non-Mexican migrants far to the south.
The crackdown followed pressure from the outgoing Biden administration and contrasts sharply with the Mexican government’s stated humanitarian goals, which aim to protect the human rights of migrants while creating employment opportunities for those who decide to stay in Mexico.
Sheinbaum emphasized the humanitarian focus on Friday.
“What we are looking for is not only the containment of migration in the south, but also that there can be employment,” she said, stressing the need to attend to the root causes of migration.
But migration experts and advocates, who already consider the Mexican government’s migration policies as too harsh, fear that these measures will only harden once Trump takes office.
“With the new U.S. government, these (Mexican) enforcement measures will grow even stronger,” said Jose Maria Garcia, the director of a migrant shelter in the northern border city of Tijuana.
Darlin Castro, a Venezuelan migrant currently in southern Mexico, said she feels the country’s migration policies are hypocritical.
“Mexico says it helps migrants but that is not the case,” she said.
Trump’s radical second-term agenda set to test Mexico’s fragility
During his first presidential campaign in 2015, Donald Trump blamed Mexico for taking US jobs while exporting drug traffickers and rapists. But five years later, he had updated the treaty binding their economies and called his Mexican counterpart a “great guy”.
Mexico’s business leaders felt they weathered the first Trump storm relatively well. Some believe President Claudia Sheinbaum can follow the playbook that worked for her predecessor Andrés Manuel López Obrador: don’t criticise Trump and give him what he wants on migration. But a second Trump administration poses far more serious challenges for Mexico, the biggest trading partner of the US. Business leaders and experts on the bilateral relationship fear that the fledgling Sheinbaum government is not well placed to navigate them.
Trump will be a more powerful president this time, with likely majorities in both houses of Congress, He will be determined to press a harder bargain with his weaker southern neighbour, which is suffering from drug-related violence and sluggish growth.
“Trump redoubled is much more difficult to deal with . . . he is a bully, and [Sheinbaum] is an inexperienced national politician,” said Andrés Rozental, a former Mexican deputy foreign minister. “I get the impression that it’s going to be a lopsided relationship, with the Americans demanding constantly more from Mexico, and Mexico being unable to commit or even to make a major difference.”
Trump’s campaign threats — blanket tariffs, inducements to US companies to bring production back home, the mass deportation of around 11mn illegal migrants and the designation of drug cartels as terrorist groups — would hit Mexico disproportionately hard. Around half the migrants living without papers in the US are Mexican, Mexico is home to two of the world’s biggest and most feared drug cartels, and the country depends on the US market for 83 per cent of its exports. Trump will be one of the biggest challenges for Sheinbaum, a leftwing party loyalist and scientist whose academic background and stiff public manner could hardly be more different from the former New York property tycoon’s swashbuckling past.
Mexico’s first female president has said little so far about how she plans to deal with Trump, other than that there was “not a single reason to worry” about the countries’ “good relationship”.
Her predecessor and mentor López Obrador built an unexpectedly strong personal rapport with Trump. Despite the two men’s ideological differences, they shared a preference for an authoritarian populist, nationalist style of government and transactional diplomacy. López Obrador deployed the military-led National Guard to block migrant routes and agreed to take back third-country migrants as they waited for their US asylum claims to be heard, while Trump backed off on threats to close the border, raise tariffs and make Mexico pay for a border wall.
Under Joe Biden’s presidency, the relationship continued along similar lines, with the US avoiding public criticism of Mexico’s rampant drug violence and López Obrador’s attacks on democratic institutions, in return for co-operation on holding back the flows of migrants. Arturo Sarukhán, a former Mexican ambassador to the US and Washington-based consultant, said that while Sheinbaum would probably be more ideological than López Obrador, “what’s even more important is how a profoundly misogynistic man like Donald Trump will interact with the first woman president of Mexico”.
Private sector and currency investors remain hopeful for a repeat of the Trump-López Obrador love-in, with this week’s fall in the peso not as steep as when Trump was first elected. One senior banking executive said most of his big Mexican clients wanted Trump to win, hoping the Republican’s trade war with China would push more US companies to invest south of the border.
“We’re interdependent whether we like it or not,” said Antonio Ortiz-Mena, founder of AOM Advisors and a former diplomat. “Mexico has more savvy and more market leverage and joint production leverage than [people think].” But patience with Mexico has run thin in the US capital in recent years, with co-operation on fighting drug cartels at a recent low, US companies complaining of a deteriorating business climate, and Mexico ignoring US concerns about a wide-ranging overhaul of its judiciary.
Observers in Washington point out that the country lacks powerful friends on Capitol Hill who would help it fend off hostile legislative moves. Sheinbaum has yet to name an ambassador to the US. “I’m not sure the situation in 2024 is the same as in 2018,” said Martha Bárcena, Mexico’s ambassador to the US during the first Trump administration.
“I see many more changes in US public opinion that is seeing Mexico less and less as a friend and more as a national security threat.”
The Mexican leader’s hard-left credentials are also unlikely to endear her to Trump. Sheinbaum did not deny claims from Colombian President Gustavo Petro last month that she was a former member of his now-defunct M-19 guerrilla movement during the 1980s and she recently sent an aid shipment of oil to Cuba’s communist government. Trump’s “policy towards Latin America is going to be controlled by the Cuban-Americans in Florida”, said Bárcena.
“They will not be happy with Mexico giving oil to Cuba, helping [Venezuela President Nicolás] Maduro . . . that will be another very big point of friction.” Hanging over the bilateral relationship is an impending review of the US-Mexico-Canada free trade agreement negotiated by Trump during his first term.
“Trump has already linked trade and migration during his campaign, threatening to use economic leverage to restrict migrant flows through Mexico,” said Eric Farnsworth, vice-president of the Council of the Americas business lobby in Washington. “Sheinbaum will have to decide whether to resist this approach or . . . to accommodate US priorities. With a mandated review of USMCA in 2026, the stakes are monumentally high.”
Mexico and the United States will establish working groups to “develop water conservation for the benefit of both countries,” the IBWC said.
Guadalajara, Jalisco, Mexico – IKEA’s long-awaited arrival in Guadalajara is finally here. On November 14, the Swedish retail giant will open its largest store in Mexico, located in Zapopan, adjacent to Guadalajara. This marks IKEA’s fourth location in the country and promises to bring a new shopping experience to the people of Jalisco.
“We expect strong turnout in our first month, aiming for 60,000 visitors,” said Cédric Gulbierz, director of IKEA Guadalajara. “Many residents here have been eagerly awaiting this opening.” Gulbierz noted that IKEA’s product range is unique, offering designs and prices that set it apart in the market.
The choice to open in Jalisco reflects the state’s promising demographics, with a young, fast-growing population. Governor Enrique Alfaro emphasized that IKEA’s expansion aligns with his administration’s goals to foster an environment conducive to private investment. This approach recently attracted other major players like Taiwanese electronics manufacturer Foxconn, which announced a substantial investment in Jalisco to produce advanced “superchips” for Nvidia.
The store’s opening also highlights IKEA’s commitment to improving customer satisfaction in Mexico. With around 8,400 products on-site, customers can find what they need and even bring it home the same day. Head of IKEA Retail Mexico Jaap Doornobs shared that Guadalajara has been the leading city in online sales growth on IKEA’s platform, which now serves all 32 states in Mexico. IKEA anticipates that 12% of store visitors will come from cities beyond Guadalajara’s metro area, underscoring the brand’s reach and appeal across the region.
Moreover, IKEA is working to deepen its ties with the Mexican market, with 11% of products sold in its stores manufactured locally. The company is actively exploring partnerships with more Mexican furniture producers to increase this figure, boosting local industry while enhancing its product range.
With its doors soon to open, IKEA Guadalajara is set to become a go-to destination for quality home furnishings, combining Scandinavian design with a Mexican touch to meet the needs of a growing, design-conscious population.
Before the inauguration of Mexican President Claudia Sheinbaum Pardo on October 1, her first diplomatic conflict had already begun. Although she invited the Spanish president, Pedro Sánchez, to her inauguration, she denied attendance to King Felipe IV of Bourbon. Claudia justified her actions by highlighting the event where King Felipe’s refused to answer a diplomatic letter written by former President Andrés Manuel López Obrador (AMLO) in 2019, where he asked the king for an apology on behalf of the Spanish crown for the violence and massacres in Mexico during the Spanish conquest and the colonial period.
On the American continent, Canadian Prime Minister Justin Trudeau apologized to Indigenous nations for the residential schools (where native children were killed) and even Pope Francis apologized on behalf of the Catholic Church for the violence in the evangelization of Mexico. These apologies likely gave AMLO the idea that he could obtain one from the Spanish crown, which he requested again in 2021.
That same year, AMLO apologized in the name of the Mexican state to the Mayo and Yaqui Indigenous communities in Northern Mexico for the massacres carried out by the state under Porfirio Díaz, Mexico’s last dictator. He also apologized to the Mayas in the southern state of Yucatán for the brutal Caste War, and to the Tzotzil people for the massacre of Indigenous people in Acteal. And of course, the massacres of Chinese migrants during the Mexican Revolution.
Spain celebrates its National Day (Día de la Hispanidad — Colombus Day) on October 12 — the date when Christopher Columbus set foot in the American continent. This day is the greatest source of pride for any nationalist and patriot and is also the celebration of the beginning of a colonization process that would lead to the creation of the Spanish empire and immortalize Spain in history as a conquering country. However, it would leave an indelible mark on the native peoples.
The black legend and the golden legend
Since 1552, the controversial book “Brevísima Relación de la Destrucción de las Indias” (A Short Account of the Destruction of the Indies) by the monk Fray Bartolomé de las Casas would reveal the excesses committed by Spanish conquistadors in the encomiendas. Centuries later, in 1914, historian Julián Juderías would spread the term “black legend,” claiming that this depiction of Spanish history in the Americas was biased and false, with the intention of portraying Spain as an enemy rather than as a cultural ally, a “humanist” that granted equal treatment to Indigenous peoples in the Americas.
Nevertheless, for the Hispanic patriot Juderías, the history of Spanish colonization was painted as a “black legend.” One common complaint was that it was the Anglo-Saxon countries — first the British Empire and later the United States — that incited hatred toward the motherland, disdain for the Hispanic past, and encouraged rebellions in Latin America.
Of course, the attempted “reconquest” by King Ferdinand VII in the 19th century painted a different picture. In 1829, the Spanish tried to reconquer Mexico by besieging the coastal city of Tampico, and in 1862 Spanish forces joined a military expedition with England and France to collect debts to Mexico. Historically, there are reasons to understand the anti-Spanish sentiment during the 19th century.
There is a glorified idea of the Spanish Empire as a provider of culture, Catholic values, and civilization to the Mesoamerican nations, falling into denials such as the “quinto real” (the percentage of gold extracted from the colonies and sent to Spain) and defending the notion that this wealth was used to promote the construction of cities, palaces, universities, and cathedrals.
An idyllic past is portrayed, where miscegenation was consensual, where Indigenous peoples had equal representation under Spanish law, and where Hispanic violence was always overshadowed by the human sacrifices celebrated by the Aztec and Inca empires. The fact that Indigenous peoples were not eliminated as they were in the United States or Canada provides a justification for the colonization process.
The new Mexican identity
Mexico, unlike other nations in the region, went through a revolutionary process from 1910 to 1920 that marked a drastic change in all institutions and social classes. Suddenly, landowners of Spanish heritage, magnates who had inherited fortunes since the colonial era, lost everything at the turn of the 20th century. For Mexicans, it was easier to identify with the farmers and workers who had fought in the revolution than with the white Spaniard descendant elites that adorned the estates and public buildings. For Mexico, it made more sense to connect with an Indigenous past than with a Spanish one.
“La Raza Cósmica” (The Cosmic Race) (1925) by José Vasconcelos, the first secretary of public education, would be decisive in shaping a more homogeneous model of national history. It portrays Mexican identity as the union of two bloodlines, two worlds. A being stemming from both an Indigenous past and a Spanish one, it exalted Mexican nationalism while never forgetting the cruelty involved in the founding of Mexico.
Until the 1990s, during the administration of former president Salinas de Gortari, the term “Encounter of Two Worlds” was used to refer to the interactions between Spanish conquistadors and Indigenous peoples.
The diplomatic conflict
In 2019, when AMLO sent the letter, a response from the Spanish crown was expected. That response never came. Spanish investors in Mexico and the Spanish right, led by the president of the party VOX, Santiago Abascal, and a congresswoman of the People’s Party (PP), Cayetana Álvarez de Toledo, began to criticize AMLO’s government, which the former president saw as an act of intervention in his administration.
Sheinbaum wrote a tweet explaining that her refusal to invite the King of Spain was not due to any ideology, but rather because of his refusal to respond to a letter from the president of Mexico. Now, as president of Mexico, she would remind Spain that debts are not forgotten.
Some attitudes of the Spanish kings are difficult to forget, such as King Felipe VI’s refusal to stand up from his seat in the presence of the sword of Colombia’s liberator Simón Bolívar during the investiture ceremony of Colombian President Gustavo Petro Urrego in 2022. Or the famous “Why don’t you shut up?” from King Juan Carlos I, directed at the late Venezuelan President Hugo Chávez.
If the Spanish crown is interested in deepening its relationship to Mexico, then an apology can strengthen those ties. However, as Spain is linked to the common European interests of the European Union, not Latin America, asking for an apology for an event that occurred 700 years ago seems ridiculous to them and Spanish investors have no problem continuing to invest in Mexico. Only the future will tell if there is a change of thinking in Spanish society to reconsider its role with Latin America.
Mexican Peso shakes off inflation data, soars on Fed rate cut
- Mexican Peso posts four consecutive days of gains; USD/MXN tumbles below 20.00.
- Mixed Mexican data as inflation rises, but core inflation dips, potentially allowing further Banxico easing.
- Supreme Court dismisses judicial reform challenge, easing Mexico’s political tensions.
- Fed cuts rates by 25 bps; signals balanced risks but cautious outlook.
According to the Fed’s statement, officials see a solid economy even though the job market has eased somewhat. The committee acknowledged that inflation made progress toward the central bank’s 2% goal but added that it remains elevated.
Fed policymakers added that the risks of achieving its dual mandate “are roughly in balance,” and that they would remain attentive to the risks of both sides of the dual mandate.
Regarding the balance sheet, they would continue to reduce their holdings of Treasury securities, agency debt, and agency mortgage‑backed securities.
When making future decisions, the FOMC will consider incoming data, the evolving outlook, and the balance of risks. It is worth noting that the decision was unanimous, as Governor Michelle Bowman supported the rate cut.
Earlier, the Instituto Nacional de Estadística Geografía e Informatica (INEGI) revealed that headline inflation for Mexico in October rose above estimates, but core dipped, clearing the way for further easing by the Bank of Mexico (Banxico).
Meanwhile, political turmoil faded after the Supreme Court dismissed Judge Juan Luis González Alcántara Carranca’s proposal to invalidate some parts of the judicial reform bill approved in September.
President Claudia Sheinbum said she spoke with presumptive US President Donald Trump. “We had a very cordial call with President-elect Donald Trump in which we talked about the good relationship that there will be between Mexico and the United States,” she published on her X account.
Across the border, the US Bureau of Labor Statistics (BLS) revealed that the number of Americans applying for unemployment benefits rose above the prior week’s report, as expected.
Daily digest market movers: Mexican Peso clibmbs after Fed’s decision
- The USD/MXN will likely remain volatile after the US elections. Trump’s harsh rhetoric against Mexico and threats of imposing tariffs could increase the action. Traders should be aware of everything he says or tweets.
- Mexico’s Inflation in October rose from 4.58% to 4.76% YoY, exceeding estimates of 4.72%. Underlying prices dumped from 3.91% to 3.80% YoY, below forecasts of 3.85%.
- Automobile Exports rose from 4.8% to 5% YoY. Meanwhile, production dropped from 11.7% to 1.1%, hinting at the ongoing deceleration in the manufacturing sector.
- The BLS revealed that US Initial Jobless Claims for the week ending November 2 increased from 218K to 221K as widely expected.
- On Tuesday, the US economic schedule revealed that the Balance of Trade deficit widened while business activity cooled slightly.
- S&P Global revealed that October’s service activity dipped, while the Institute for Supply Management’s (ISM) Services PMI improved for the same period.
- Data from the Chicago Board of Trade, via the December fed funds rate futures contract, shows investors estimate 49 bps of Fed easing by the end of the year.
Nerves frayed in Canada and Mexico over US trade relations
As Americans prepare to vote for their next president, Canadians and Mexicans are watching on nervously.
For some Canadians living next to the US border, politics isn’t a topic often discussed.
“You don’t talk politics and you don’t talk religion,” says 85-year-old Ernie, who lives in the Canadian town of Fort Erie, just across the Niagara River from Buffalo, New York.
Yet for others in Fort Erie, Ontario, politics can come up, especially after a few beers, and with a US presidential election fast approaching.
A short walk from the Peace Bridge that connects the two countries is Southsides Patio Bar & Grill, where US-born bartender Lauren says she frequently has to break up political arguments.
“It happens, especially after a few drinks. Everybody’s voice is heard here,” she laughs while shaking her head.
Some 2,000 miles (3,200 km) southwest in the Mexican border city of Juarez, Sofia Ana is in the Monday morning queue of cars waiting to cross to El Paso, Texas for work.
“There’s better employment opportunities in the US, there’s better benefits,” she explains.
Ana is one of an estimated 500,000 Mexicans who legally cross the border into the US every week day.
It is in their interest that relations between the two countries remain cordial. “It affects us deeply… it is very intense,” adds Ana from her car window.
With more than 155 million Americans due to vote in the US presidential election on 5 November, it is fair to say that the outcome will be felt well beyond the US. No more so than its largest trading partners Canada and Mexico.
The two-way trade of goods between the US and Mexico totalled $807bn (£621bn) last year, making Mexico the US’s biggest trading partner when it comes to physical items.
More than half a million Mexicans legally travel into the US every day, mostly by car
Mexico and Canada’s future trade with the US could be impacted if Donald Trump wins the US election. This is because he is proposing to introduce substantial import tariffs. These would be 60% for goods from China, and 20% on products from all other countries, apparently including Mexico and Canada.
By contrast, Kamala Harris is widely expected to maintain the current more open trade policies of President Biden. This is despite the fact she voted against the 2020 United States Mexico Canada Agreement (USMCA) free trade deal, saying it didn’t go far enough on tackling climate change.
Trump and Harris have “starkly different visions for the future of US economic relations with the world”, said one study in September.
Back in Juarez, shop owner Adrian Ramos says that US political instability is something business owners like himself have had to get used to. “We’ve seen it all,” he says.
Mr Ramos adds that the result in the US on 5 November will likely impact on his business whoever wins. “If Trump wins, it’s going to take longer to cross over to the States, if Harris wins, it may not, but there will be changes depending on who wins.”
Mexican shop owner Adrian Ramos says that Mexicans will be affected by the US election result no matter who wins
In the rural Canadian township of Puslinch, Ontario, beef farmer Dave Braden is definitely more concerned about Trump returning to the White House.
“The worry with Trump is that he’ll introduce a policy [such as tariffs], and just say ‘get on with it’ and that is threatening,” says Mr Braden, standing between hay bales in front of one of his cattle fields.
“I think with Harris, we have the assumption that she will recognize the relationship between the two countries and we will work together.”
The Canadian Chamber of Commerce is also concerned about the possibility of a second Trump presidency introducing new tariffs. It calculated that tariffs of 10% on Canadian imports (a level that Trump has previously suggested), would cost each Canadian and American $CA1,100 ($800; £615) per year.
The Canadian government has reportedly been talking to Trump’s camp to try to exempt Canada in the event that he does win the election.
Not every Canadian has such fears about Trump though. One Ontario farmer who is supporting him didn’t want to speak on the record, but says he believes the former president is stronger on the economy, which would benefit Canada.
For Georganne Burke, the Republicans Overseas chapter leader for Canada, it’s no surprise that some Trump supporters don’t speak publicly about him. She says that backing Trump is “not a popular position to be in”.
Recent polling suggests that Harris is significantly more popular than Trump among Canadians.
The USMCA, which was negotiated in 2018 under Trump’s presidency, is up for renegotiation in 2026.
With that on his mind, Canada’s Minister for Innovation, Science and Industry Francois Champagne tells the BBC he is checking the US election polls daily.
“Because this is such a valued relationship. It’s why I call it this indispensable relationship, because when you look at everything, you realise how indispensable we are to each other,” he explains.
In the run up to the election Mr Champagne is spending time meeting American counterparts of both parties. In his words “connecting the dots”.
“For example, when I meet the governor of South Carolina, which has a plant in the auto sector, I remind him that a lot of the critical minerals are coming from Canada,” he says. “So, it’s making sure that everyone understands that we are joint at the hip in terms of security, supply chain, but also a growth agenda for North America.”
Lila Abed, an expert on US-Mexico relations, says that whatever November’s outcome, “there will be three essential topics on the bilateral agenda with Mexico that are going to have to be dealt with immediately” – migration, security and trade.
“It is telling that [new Mexican president] Claudia Sheinbaum hasn’t designated Mexico’s ambassador to the US,” adds Ms Abed, who is director of the Mexico Institute at the Washington-based Wilson Centre think tank.
“I don’t believe that will be announced until after the US presidential election, because she wants to take into consideration what kind of individual she wants in Washington after the result.”
Looking ahead to 2026, Ms Abed believes the USMCA renegotiation will focus on US efforts to stop increased Chinese investment in Mexico.
“Where Republicans and Democrats actually coincide is on trying to stem or trying to stop Chinese investment in Mexico, which is something that both political parties in the United States are very concerned about,” she says.
“While I believe that, you know, the tone and the policies will naturally differ depending on who wins the White House, I do believe that the main issues on the bilateral agenda will remain.”
PAST ARTICLES
Mexican President Worries Trump’s Immigration Policies Will Affect Remittances, a Top Source of IncomeMexico to stick with policies aimed at stopping migrants after Trump win
Mexico economy chief suggests possible tariff retaliation against US
The Good and Bad News about Guayabitos Municipal Water Service 2024