MI’s Mexico Public Affairs Chatter – May 13, 2025

May 13, 2025
8:16 am

The Worm That Roared: How a Tiny Pest Sparked a Trade Tempest

The Sheinbaum administration faces an unexpected agricultural and diplomatic mini flare-up after the U.S. Department of Agriculture suspended live cattle imports from Mexico for 15 days. The measure, triggered by screwworm outbreaks in states like Oaxaca and Veracruz, more than 700 miles from the border, has rattled the northern livestock industry and reignited tensions in cross-border trade.

Framed by the U.S. as a technical health measure subject to monthly review, the decision landed in Mexico as a unilateral breach of trust. Agriculture Secretary Julio Berdegué called it “unjust” and presented an aggressive containment strategy: 90 million sterile flies released weekly, supported by a MXN 165 mn campaign (~US$8.5 mn) and coordinated with the U.S. Animal & Plant Health Inspection Service (APHIS).

The overall economic hit is not large, but for those affected is nonetheless a real issue. The National Agricultural Council estimates daily losses at US$11.4 million, or US$171 million if the embargo holds. Sonora and Chihuahua, the big cattle-exporting guns, send more than 5,700 head of cattle across the border daily. Even U.S. processors are reportedly squirming at the prospect of supply shortages—though they’re not lobbying for Mexico’s case just yet.

Sheinbaum’s team is scrambling to contain both the outbreak and, just as importantly, the narrative. Expanded quarantine zones, fly-drops across southern states, and fast-tracking certified crossings at Piedras Negras and Puerto Palomas are all part of the fix-it plans. But none of it changes the underlying political challenge. Trump’s team has already started hinting at tariffs if Mexico “fails to protect U.S. farmers.” The Sheinbaum government insists it’s technical, not political. But in the U.S.-Mexico trade agenda, it just might be impossible to separate the two.

USMCA: Ready or Not, Here Comes Trump

Mexico’s trade diplomacy may soon face its toughest test yet. Economy Minister Marcelo Ebrard announced that the USMCA’s formal review—initially scheduled for mid-2026—could begin in the second half of 2025. He was cautiously optimistic: “It might be convenient,” he said, citing the need for clarity amid Trump’s shifting tariff map and global economic volatility.

The announcement breaks with the government’s earlier strategy of delay and denial. With Trump pushing a more transactional version of “America First,” Mexico’s steel, automotive and agricultural sectors have already seen new trade restrictions—and the rhetoric is only getting sharper. Trump has suggested he wants to scrap or rewrite the deal entirely.

While the government tries to project calm and confidence, the private sector is already in battle mode. Juan José Sierra Álvarez of Coparmex confirmed what many suspected: Mexico’s business elite are already pressing U.S. officials to keep the agreement alive. With advisors including renowned trade veterans like Herminio Blanco and Jaime Zabludovsky reportedly in tow, Mexican businesses are pulling out all the stops to secure a favorable deal.

For her part, President Sheinbaum struck a tone somewhere between defiance and damage control. “We will defend the USMCA,” she said last week, adding that contingency planning is underway in case Trump does try to terminate it. Her administration is betting on the idea that shared supply chains, mutual investment, and labor interdependence will keep cooler heads prevailing – no small bet as Mexico faces the renegotiation of its most crucial economic agreement.

Entry Denied: When Foreign Policy Becomes Personal

The U.S. visa revocation for Baja California Governor Marina del Pilar Ávila and her spouse has triggered more questions than answers—and more political whispers than official statements. She quickly clarified at a press conference: “The State Department’s decision does not define me. My values define me.” According to her, this is an “administrative measure,” not a legal accusation. “There’s no crime, no wrongdoing,” she insisted.

Technically, she’s right. But in politics, perception is often more damaging than fact. A visa cancellation for a sitting governor—especially one from a border state—doesn’t happen in a vacuum. And all the explanations in the world won’t erase the shadow it casts. In a moment when Mexico-U.S. relations are strained by digital reforms, trade disputes, and security concerns, this move looks less like a clerical hiccup and more like strategy to drive up the pressure.

Regulate, Compete, Censor: Mexico’s New Digital Trifecta

The Senate’s open forums on Sheinbaum’s telecom reform have quickly turned into a high-stakes confrontation. Business leaders from the CCE, ICC, AMCHAM, and CANIETI are sounding alarms about constitutional violations, regulatory overreach, and the undermining of investor confidence. They warn that the initiative could breach USMCA obligations and damage Mexico’s digital competitiveness.

At the center of the storm is the proposed concentration of power in the newly created Digital Transformation and Telecom Agency (ATDT), which would regulate while simultaneously competing in the market. “The state would act as both referee and player—with home-field advantage,” said Gabriel Contreras, speaking for the CCE. He pointed to Article 28 of the Constitution, which requires all spectrum concessions to be publicly auctioned—something the reform would sidestep.

The ICC’s Miguel Calderón added that the ATDT’s sweeping powers—bypassing public consultations, accessing user data without court orders, imposing broadcast-style restrictions on digital platforms—would turn Mexico into a regulatory outlier. “It’s not about excluding the state,” he said, “but ensuring it plays by the same rules.”

Guillermo Bernal, Director of Public Affairs at the American Chamber of Commerce, warned that the current moment is highly sensitive for U.S.-Mexico negotiations. Given the delicate bilateral context, opening a new front of potential USMCA violations through the proposed telecom reform would be particularly risky.

Alfredo Pacheco Vázquez, Head of CANIETI, stated that the chamber submitted a formal position to the Senate urging a review of the telecom reform and a deeper discussion on passive infrastructure provisions. He warned that allowing the federal government to hold commercial concessions and offer services directly to end users, without public bidding, would distort fair competition and exempt the state from regulatory obligations that apply to private operators.

President Sheinbaum has since ordered the removal of the law’s most controversial clause—Article 109, which allowed content blocking. Still, critics say other provisions open the door to discretionary enforcement and indirect censorship. Jorge Bravo of AMEDI warned that the reform risks “rebuilding a digital wall around Mexico’s information ecosystem.”

Outside the forum, IFT employees protested the agency’s imminent dissolution. Sheinbaum insists the law respects freedom of expression and aims to improve connectivity. But as Adriana Labardini, former IFT commissioner, put it: “This isn’t just about regulation. It’s about the future of Mexico’s digital state.”

Banking on Justice: Emilio Romano Takes the Helm of Mexico’s Banking Sector

In a signal of institutional recalibration, Emilio Romano, CEO of Bank of America Mexico, assumed the presidency of the Mexican Banks Association (ABM) for the 2025–2027 term. This is the first time the Head of a foreign bank focused on Investment and Wholesale banking has taken the helm of the ABM, which has moved on from the days when the organization was run by the country’s retail bank-owning billionaires. Romano’s message to the Sheinbaum administration was clear: the banking sector is ready to help, extending more credit, and even doing its best to make judicial reform workable.

Romano’s top priority is the creation of specialized commercial courts—an old request from the private sector aimed at ensuring faster, more reliable enforcement of contracts. Legal certainty, he argued, is the foundation for credit expansion and broader financial inclusion.

The ABM’s new agenda also includes reducing cash use, improving access to credit for women and small businesses, and digitizing public-sector transactions. Romano proposed capping high-denomination bills, streamlining compliance for SMEs, and expanding digital payments. “It’s not whether Mexico becomes a developed economy,” he said, “it’s how fast.”

Sheinbaum welcomed the outreach. At the convention, she highlighted that bankers applauded her core message—“For the good of all, the poor first”—framing it as proof of a new public-private alignment. Still, even if you would not have guessed this from Sheinbaum’s Panglossian speech, the event unfolded under the shadow of Trump’s tariff threats, anemic GDP projections, Pemex’s deepening crisis, and rising fiscal pressures.

Outgoing and highly respected ABM president Julio Carranza warned of global turbulence ahead but emphasized that Mexico’s banking system remains well-capitalized and resilient. Finance Minister Edgar Amador pushed banks to deploy more capital, especially to SMEs, and confirmed that private credit is expected to grow 7.1% this year.

Romano’s leadership begins with positive momentum: historic high profits in 2024, stable delinquency rates, and renewed government interest in unlocking financial access. But it will be tested by politics, reform, and volatility. For now, however, the outlook for cooperation is promising.

Contact:

Gilberto García

Partner and Head of Intelligence

gilberto.garcia@miranda-partners.com