Mexico Dodges a Bullet—For Now
President Trump’s tariff war has been a shock to the global trade system, and as it drags on, the odds of a worldwide recession continue to climb, according to almost all analysts. The newly imposed tariffs are shaking the foundations of international commerce, even as the outcome remains uncertain amid ongoing negotiations and looming retaliations. The forecast? Slower growth pretty much everywhere and more inflation in the US.
And yet, for Mexico, it was a rare moment of calm, even victory, in the trade storm. As Trump’s “Liberation Day” tariffs rattled China, Europe, and much of Latin America, Mexico was left off the hit list. President Claudia Sheinbaum called it a victory for diplomacy (though political pundits would point out that Canada was similarly spared, despite a much more combative stance). The peso rallied (initially), the stock market responded favorably, and Marcelo Ebrard hailed the exemption as proof that the North American trade agreement remains intact—even in an increasingly protectionist world.
Still, the celebration comes with caveats. Exemption applies only to goods that meet the agreement’s rules of origin. Steel, aluminum, and some auto exports remain exposed, and with Ebrard giving himself just 40 days to renegotiate terms, there’s no guarantee that Mexico will remain shielded. The automotive sector, which supports 10 million jobs, hangs in the balance.
Vehicle exports from Mexico declined 6% in the first quarter of 2025 compared to the same period in 2024, with 775,866 units shipped globally—83% of which were destined for the US—according to AMIA President Rogelio Garza. He attributed the drop partly to some automakers pausing shipments to the US due to tariff uncertainty. While March exports rose 3.8% year-over-year, overall quarterly figures reflect a mix of caution and tough comparisons to an unusually strong 2024. Garza noted that negotiations are still ongoing, and companies are waiting to see how the new trade rules take shape before resuming normal export levels.
Moreover, wider implications are already visible. Stellantis paused production at its Toluca plant and temporarily furloughed 900 workers, citing uncertainty created by the US trade stance. Sheinbaum downplayed the news, describing it as a market adjustment rather than a sign of broader job losses. But it’s a warning shot. Media reports have also noted paused investments, such as BYD’s decision to pause the construction of a plant in northern Mexico – which might help in the narrative against Chinese influence, but also put 10,000 new jobs on hold. With the peso and stock index both sliding amid global jitters, the clock is ticking for Ebrard, who’s headed back to Washington this week for yet another round of high-stakes talks.
In this heavy (and at times contradictory) news flow, optimists would point out that nearshoring, long declared dead by some, seems to be making a comeback. Should the USMCA stand, Mexico will maintain significant comparative advantage over certain Asian countries that currently manufacture a substantial share of goods that could just as easily be produced here—clothing, footwear, sporting goods, furniture, and electronics, among others. It’s not quite yet time to declare victory, but the outlook is more promising than it was just a week ago. Unless the world heads into a Trump-induced depression, in which case all bets are off.
Pension Time Bomb: Sheinbaum’s CNTE Headache Returns
The battle over pensions is heating up again. Weeks after President Sheinbaum withdrew her proposed ISSSTE reform in response to massive teacher protests, the CNTE is preparing for an indefinite national strike. Their goal: nothing short of repealing the 2007 pension reform.
The union argues that the current system condemns workers to a life of poverty in retirement. The shift to individual accounts and age-based retirement, they say, has slashed benefits and forced teachers to work far beyond their years of service. Even with the retirement age “frozen” by presidential decree, the CNTE says it’s not enough—they want a return to the solidarity-based model, with 28 years for women and 30 for men, no private accounts, and pension metrics tied to inflation indexes.
On April 11, the union will hold a National Representative Assembly to vote on the strike and coordinate nationwide mobilizations. Their demands include not only pension reform but also a comprehensive overhaul of the ISSSTE, salary increases, reversal of the 2019 education reform, and a rescue of the institution’s collapsing healthcare services.
Framing the conflict in ideological terms, CNTE leaders have called the ISSSTE reform part of a broader attack on labor rights. Their rhetoric is old-school, but their strategy is effective. President Sheinbaum now faces a tricky balancing act.
The CNTE also claims that behind these measures lies a not-so-subtle attempt to favor big business. “They can promise interest waivers for early mortgage payments all they want, but the truth is, they’re trying to recapitalize Fovissste to benefit a tight-knit group of 22 Mexican business families who’ve built their fortunes under the wing of political power,” the organization alleged.
So far, the CNTE hasn’t set a date for the indefinite strike but has made it crystal clear: the protests will continue until their demands are fully met.
The Disappearance Reform That’s Going Nowhere
The discovery of a clandestine extermination camp in Jalisco should have been a turning point. Instead, it became a legislative logjam. In response to the Rancho Izaguirre case, Sheinbaum unveiled reforms to Mexico’s disappearance laws and introduced a national security package aimed at reshaping the country’s investigative and intelligence frameworks. But neither proposal is moving.
The human rights community responded first. The UN’s High Commissioner for Human Rights, Volker Türk, issued a sharp critique of the disappearance reform, warning that centralization must not come at the expense of family participation. Search collectives echoed his concerns, calling the proposal a bureaucratic power grab that sidelines the very people driving Mexico’s search efforts, ignoring the voices of victims’ families.
Amnesty International bluntly stated that any reform on disappearances that sidelines those directly affected is simply unacceptable. Critics say the administration has shown little interest in dialogue or collaboration, despite families’ repeated willingness to engage. Experts have pointed out that six of the ten proposed measures already exist, raising the uncomfortable question of whether this is meaningful reform or just political theater.
Then Congress stepped in—or rather, stood still. Ricardo Monreal confirmed that both the disappearance and security reforms have been put on hold. Despite Morena’s majority, internal divisions and resistance from allies have derailed the legislative timeline. Lawmakers from Morena, PAN, and PT are now proposing changes of their own, slowing momentum.
Monreal is already preparing for a special session in June or July to address the backlog, which includes nearly 50 secondary laws left pending from late 2024. For Sheinbaum, the challenge is no longer just getting things passed: it’s keeping her coalition on the same page.
Contact:
Laura Camacho
Executive Director Miranda Public Affairs
laura.camacho@miranda-partners.com
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