Mexico benefits from Trump-induced trade uncertainty

Despite uncertainty from Donald Trump's trade policies, Mexico emerges as a clear beneficiary in international trade, according to Mauricio Naranjo, CEO of Monex. At the EF Meet Point on Economic Expectations 2026, the expert highlighted increasing trade flows to Mexico, driven by exchanges with the United States. Sectors like automotive, machinery, and electronics show notable dynamism.

Mauricio Naranjo, CEO of Monex, stated that Mexico is an evident beneficiary of changes in international trade amid Donald Trump's policies. At the EF Meet Point on Economic Expectations 2026, he noted that, despite tariff tensions, trade flows to Mexico are increasing, particularly with the United States, its main partner in imports and exports.

Naranjo emphasized that North American integration is strengthening. 'International trade, despite everything this year and what we're seeing, is that flows, particularly to Mexico, are increasing,' he detailed. He highlighted dynamic sectors like automotive, including parts, machinery, electronics, and medical devices.

He also pointed to the role of Mexico's young, technically trained university graduates as a key input. The agricultural sector has grown recently, as has the tertiary sector with emerging service industries, all with high potential.

'I think it's something that would have been hard to anticipate when we saw this tariff discussion at the start of the year. Nevertheless, this integration process in the North American bloc continues to strengthen,' he explained. Mexico remains a trade powerhouse, and Monex supports this through digital international payments and efficient trade financing.

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Split-image illustration showing Mexico's booming FDI inflows contrasting with industrial stagnation and GDP decline.
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Mexico's economy shows contrasts with record FDI and stagnation

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Mexico recorded a record foreign direct investment of 40,906 million dollars in the first nine months of 2025, a 14.5% increase from 2024. However, GDP contracted 0.3% in the third quarter and the IGAE fell 0.6% in September, indicating economic stagnation. Analysts warn of fragility in the industrial sector and risks to employment.

Mexico gears up for a pivotal 2026 in its economy, with potential in investment and mergers and acquisitions, but regulatory uncertainty poses risks. While nearshoring provides structural advantages, the local transaction slump contrasts with recovery in the United States. Experts emphasize the need for certainty to draw global capital.

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Alejandro Werner, director of the Georgetown Americas Institute, warned that Mexico will achieve a favorable T-MEC negotiation with the United States, but in a context of institutional weakness due to unilateral US tariff decisions. He recommended that the Mexican government focus its growth strategy on internal reforms such as competition, deregulation, and education. He also projected that inflation will not drop below 4% in the coming years due to wage pressures.

Concerns are growing over Korean companies' operations in Mexico after the country approved tariff hikes of up to 50 percent on products from Asian nations without a free trade agreement. The measures affect machinery, auto parts, and electronic components, which make up about 30 percent of Korea's exports to Mexico. However, the industry ministry assessed that the impact will be limited due to Mexico's tariff reduction programs for intermediate goods.

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Following the December 2025 decree imposing 5-50% tariffs on non-FTA imports, Mexico's measures particularly target the automotive sector, hiking duties on light vehicles to 50% and parts up to 50%. While aiming to protect national industry and generate over 70 billion pesos in revenue, the policy draws criticism for slowing Chinese EV tech adoption, though brands remain bullish on Mexico's market thanks to local plants.

Mexico's Secretary of Economy, Marcelo Ebrard, announced that the country's investment portfolio has grown to 406.8 billion dollars, a historic record driven by new projects across the 32 states. At the First National Investment Promotion Meeting, businesswoman Altagracia Gómez emphasized the goal of reaching 25% of GDP in investments by 2026, as part of the Plan México.

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Mexico's Senate has approved legislation imposing tariffs of up to 50 per cent on more than 1,400 products from Asian countries, primarily targeting Chinese imports to bolster domestic producers. President Claudia Sheinbaum defended the move, stating it supports the 'Plan Mexico' without harming the national economy. Beijing has criticised the duties as damaging to its interests.

 

 

 

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