Sheinbaum’s Celebration (so far)
It was a celebration – a “festival”, in President Sheinbaum’s words, capping a successful week in which U.S. 25% tariffs on USMCA-compliant Mexico exports were delayed another month (and, it is expected, beyond that). A sunny Sunday with a packed Zócalo, it was a perfect stage for the newly minted most powerful woman in the world to address her supporters.
Photo of the week – Bad timing or bad omen?
President Sheinbaum was accidentally ignored by Morena’s leadership as she walked toward the stage to give her speech on Sunday. See the video on X.
The president pledged that Mexico would continue to cooperate with the U.S. to curb the flow of synthetic drugs while all but ruling out the risk of tariffs being imposed on April 2. “In Mexico’s case, these tariffs would not apply since they do not exist under the USMCA,” she assured logically, perhaps ignoring Trump’s unpredictability, or perhaps informed by Trump himself that Mexico will avoid new tariffs.
Meanwhile, Mexico is having to deal with a complex two-tier tariff system – 0% for tariffs on USMCA compliant goods, and 25% on the rest. As quoted in the WSJ, the analytics firm Trade Partnership Worldwide estimated that in 2024, 50% of Mexican exports and 38% of Canadian exports entered the U.S. duty-free under USMCA, with the rest entering under Most Favored Nation, often paying no tariffs, or 2.5% tariffs in case of assembled cars. Of the 50% entering under MFN, about 40 percentage points could be USMCA compliant but have not bothered with the paperwork, given zero to minimum tariffs under MFN. They will now have to do the paperwork. The other 10% are going to face problems.
The Mexican Automotive Industry Association (AMIA) reported that 8.2% of light vehicles and 20.4% of auto parts exported from Mexico to the United States do not comply with the USMCA’s rules of origin and would therefore presumably be subject to the 25% tariff, at least until new rules are put in place. Dario Celis, the business columnist, speculated the following. “Several of the main non-regional automakers will lose the benefit of the Most-Favored-Nation clause under the USMCA. Additionally, they will not meet the rules of origin, leaving them more exposed to the 25% tariffs that Donald Trump intends to impose. In addition to the German automakers—BMW, led by Diego Camargo, and Mercedes-Benz, headed by Stefan Albrecht—add the Japanese brands Mazda, under Miguel Barbeyto, and Honda, led by Yuichi Murata. BMW manufactures the 3 Series, 2 Series, and M2 in San Luis Potosí. Mercedes-Benz produces the GLB series in Aguascalientes. Mazda builds the Mazda 2, Mazda 3, CX-3, and CX-30 in Salamanca. Meanwhile, Honda manufactures the HR-V in Celaya.”
Meanwhile, just hours after Sheinbaum’s speech, Howard Lutnick, the U.S. Secretary of Commerce, confirmed that the 25% tariffs on steel and aluminum, including Mexico and Canada’s, are to take effect on March 12 he claims with no chance of suspension. (Marcelo Ebrard is today in Washington D.C again to try and get an exemption, arguing Mexico is a net importer of steel from the U.S.) The move, driven in part by the Trump administration’s determination to block alleged Chinese and Russian metals from entering the U.S. through Mexico, along above all with broader concerns over tariff wars and the negative impact on US economic growth, has rattled markets.
What complicates Mexico’s negotiation strategy is that this isn’t just about trade: it’s also about immigration, drug trafficking and maybe even U.S. Presidential ego (which is why more subservient Mexico seems to be faring better than Canada, despite accounting for 99x more drug trafficking and illegal immigration). Trump is explicitly tying the removal of these tariffs to Mexico and Canada’s ability to curb fentanyl trafficking, making it clear that economic pressure is just another tool in his broader strategy. Lutnick framed the policy as a matter of national security and public health, insisting that the tariffs will remain in place until Trump is personally satisfied with the results. In other words, Mexico’s trade headaches are far from over.
The effect of all this uncertainty and complexity is to impact investment and slow growth. The chances of a Mexican recession in 2025 are growing by the day, with analysts consistently cutting forecasts for growth since Trump took power. With fears of a US recession also growing, Mexico could be hit by a double whammy – nearshoring investment on pause due to tariff threats, plus US downturn.
Edgar Amador Takes Over Mexico’s Treasury—Just in Time for a Storm
President Sheinbaum finally made the long expected shake-up at the Finance Ministry: Deputy Minister and low-profile Edgar Amador Zamora is taking over as Secretary of Finance and Public Credit following the resignation of Rogelio Ramírez de la O, who had held the post since July 2021.
“He is an honest economist, fully committed to the Fourth Transformation. The entire team stays; Mexico has a strong economy,” Sheinbaum announced via social media. Indeed, Amador is respected by the few who know him, seen as down to earth, intelligent and a good listener. He may in part owe his appointment to Luz Elena González, the energy minister and former CDMX finance minister under Sheinbaum, only being in her job for five months, making it too soon to switch to Hacienda.
Amador stepped in after Trump lifted tariffs on USMCA-compliant exports, but ahead of his likely reciprocal tariff announcements on April 2. Before that, by April 1, he must submit the 2026 Economic Policy Pre-Criteria to Congress, a document that analysts see as the first real insight into Sheinbaum’s economic vision.
This article by Salvador Camarena in El País captures well Amador’s trajectory, and recounts his differences with other once-4T economists – namely, Arturo Herrera and Gerardo Esquivel, perhaps due his time as AMLO-enemy Miguel Angel Mancera’s Finance Secretary in Mexico City. (Reflecting his outcast status under the AMLO administration, in August 2020, the General Comptroller of Mexico City sanctioned Amador for alleged irregularities in the management of public resources following the 2017 earthquake, allegations Amador has firmly denied). Despite this, Amador, however, cleverly seems to have maintained good relations with Sheinbaum, who he has known well since student days in the UNAM, where both were active in left-wing student politics. He is also said to get on well with Marcelo Ebrard, and is of course very close to Banxico Governor Victoria Rodriguez, his former mentee and direct report at CDMX Finance department, who brought him in from the political wilderness and unemployment to make him an advisor back in 2022 (perhaps repaying a favor when Amador apparently resigned back in March 2018 after Mancera left the Mayor position rather than move Rodriguez).
From largely unemployed to Finance Minister in three years is no small feat. Mr. Amador will now have to prove himself as an effective political operator, standing up for Hacienda in likely fights with Pemex, CFE, Infonavit, Education, and others. With the economy perhaps heading to a recession, the real test will be his ability to convince the President to keep the fiscal deficit to 4% of GDP, and make the necessary budgets should, as likely, revenues fall short of forecasts. And with his now higher profile, he may have to forsake taking the metro to work every day.
ISSSTE Reform on Ice: Teachers Win Round One, but the Fight Isn’t Over
The ISSSTE reform isn’t going down without a fight—at least not if 60,000 teachers marching through Mexico City have anything to say about it. On March 7, educators’ union CNTE took to the streets, rejecting a reform whose stated goal is to “strengthen” ISSSTE’s finances and improve housing rights for state workers, but that teachers claim is actually a move that shifts more of the financial burden onto higher-earning employees while turning ISSSTE into an unexpected real estate developer.
For now, the reform is in limbo. Morena’s congressional leader, Ricardo Monreal, announced that the proposed changes to the ISSSTE Law will remain on hold until an agreement is reached with teachers—no timeline, no clear next steps. The only piece that is set to move forward is ISSSTE’s housing fund (Fovissste), which could undergo adjustments, aligning it with the recently approved Infonavit reform. ISSSTE’s newfound real estate ambitions would allow it to buy, build, demolish, and rent housing, all in the name of worker welfare.
While the ISSSTE reform battle lingers on the back burner, the Ministry of Education has quietly kicked off salary negotiations with the other large union, the SNTE. Among the union’s requests: a “significant” salary increase (surprisingly exactly no one) and the return of full-time schools—a popular program that was scrapped under AMLO due to budget cuts.
SNTE leader Alfonso Cepeda Salas, notably silent on the ISSSTE controversy, assured that the process would be democratic, empathetic, and responsible, filled with dialogue and a genuine desire to reach agreements. If only labor negotiations in Mexico were ever so…
Mexico vs. U.S. Gunmakers: A Legal Battle on Shaky Ground
The legal battle between the Mexican government and U.S. gunmakers began in 2021, when Mexico sued eight gun companies in a Boston federal court. After a surprising victory in January 2024, when a U.S. appellate court ruled that these companies might not be immune under American law, the case has now reached the Supreme Court, where the final decision will be made.
Mexico insists this lawsuit has nothing to do with the Second Amendment or Americans’ right to bear arms. Instead, it’s about irresponsible commercial practices that allow firearms to be smuggled across the border. President Sheinbaum frames this as a fight to prevent gun violence and curb illegal arms trafficking, with broad support from legislators, activists, and even some U.S. authorities.
In a potentially fatal blow for the Mexican case, its arguments hit a wall of skepticism at the Supreme Court, with justices questioning whether the lawsuit adequately links firearm companies to specific distributors who knowingly sell to traffickers. Justice Elena Kagan, a Biden appointee and member of the court’s liberal wing, bluntly asked Mexico’s lawyer, “Who exactly are you accusing?”, pointing out that the lawsuit lacks specific bad actors. Justice Ketanji Brown Jackson suggested that Congress never intended for courts to regulate the gun industry through lawsuits like this one.
Conservative justices were equally doubtful. Chief Justice John Roberts dismissed claims that certain firearm designs—like the Colt Super El Jefe, allegedly marketed to cartel members—constitute wrongdoing, saying “None of that is illegal.” Meanwhile, Justice Brett Kavanaugh warned that if U.S. courts allow lawsuits against gunmakers for crimes committed by third parties, other industries like automakers and pharmaceutical companies could be next.
Gun manufacturers argue they are fully shielded under U.S. law from liability related to the criminal misuse of their products. Mexico’s legal team is trying to exploit a narrow exception, which requires proving the companies knowingly violated gun laws. So far, the court appears unconvinced, leaving Mexico’s lawsuit on shaky ground.
Contact:
Laura Camacho
Executive Director Miranda Public Affairs
laura.camacho@miranda-partners.com
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