MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

• Rebate debate—President Claudia Sheinbaum’s tax policy has consisted in hunting down debtors—particularly large companies and the rich. Those who have been found owing the government money have been shown the carrot as well as the stick:
  The Mexican tax authority (SAT) offered to scrap late payers’ fines if they paid what they owe immediately. The perk only applied to those making over $300 million pesos ($17.64 million dollars) annually. SAT says that, this year, it has “recovered” $6.4 billion pesos (over $376 million dollars) of back taxes owed in 2024.
  It’s not all concessions and collaboration. This month also saw 300 trans-national corporations—including FedEx, Visa, and Walmart—send a letter to the US Congress denouncing Mexico’s “unprecedented” fiscal crackdown.

• New customs—Customs houses have also hit record collection highs on imports. One might think this was only down to the spate of tariff increases on a variety of products over the past year.

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Uncharted Mexico: Extractive expansion

Mexico’s exports have hit another historic high. The Mexico Political Economist has covered how much of this boom is down to the AI-driven demand for Mexican assembled computers. One that does not generate much value in Mexico.

There is another sector whose export value has grown at double the rate of computers—so called “extractive exports.”

Source: INEGI

These, in the Mexican statistical classification system, are the non-oil products mined from the ground. Mexico’s main extractive exports are gold and silver, which have seen big dips in price throughout 2026. So, how has the value of mining exports grown so significantly in this same period?

The main driver of growth over the past six months has been copper, which has not only continued to steadily appreciate over the past year, but has also seen big upticks in export volume. Mining companies and refiners, like Grupo México, are tapping into their reserves to cash in on the glut. A glut caused in large part by… the AI boom demand for copper.

Exports of lead have grown by triple digits in 2026, but Mexico’s monthly copper exports are comparable to a year’s worth of lead exports. Overall, extractives made up less than 2% of the value exports last year. Today they are 2.9%.

Last week’s highlights:

• Capone me once…—Donald Trump is claiming a finder’s fee on all of Ismael “el Mayo” Zambada’s wealth, after the cartel kingpin was sentenced to life in prison in the US. That’s if he can get his hands on it… A US federal judge has ordered the decommissioning of $15 million dollars. The only issue is that none of el Mayo’s alleged wealth can be found under his name, said Mexico’s security secretary Omar García Harfuch.

• New wave—Mexico is expecting a new wave of tariffs from the US. Forced labour rules are to come into force—these could block shrimp exports—while production “overcapacity” tariffs could hit Mexican manufactures generally. Nevertheless, according to a study by Global Trade Alert, Mexico is one of the countries least affected by these tariff updates thanks to the USMCA.

• Oil theft economy—Huachicol—oil theft—continues to concentrate the attentions of the Mexican government a week after a former governor was arrested for the crime. This time a makeshift refinery operated by organised crime was discovered. A 100,000% increase in imports labeled as calcium chloride was also found to be a cover up for even more stolen fuel.

Don’t get distracted by… A leaked Mazzucato document

Last week, a presentation by UCL economist and advisor to the Sheinbaum administration, Mariana Mazzucato, was criticised widely by the opposition. This analysis of Mexico’s industrial policy apparently was a leak of a working document presented for further discussion with the Mexican government, a person with knowledge of the issue told The Mexico Political Economist. A more complete study will be published soon.

Local zoom in on… Hangover from 2024 in Tequila, Jalisco

The threat of plague looms over Mexico’s tequila plantations as millions of tonnes are abandoned in the fields. A glut in agave planting (the core component of the drink) in 2024 has led to a collapse in prices which have fallen by 92% in a year. This makes just harvesting the agaves unprofitable, leaving them open to pests that grow on the fallow plantations only to spread to the rest.

Though sales of tequila grew last year, volume has fallen. The Mexican government in part blames tariffs for this; with the economy secretary Marcelo Ebrard pointing at “some countries” that have up to 150% import fees on tequila. He is now threatening reciprocal tariffs in response.

MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Uncharted Mexico: A governor finally falls

Ernesto Ruffo, former governor of the border state of Baja California (1989-1995), was arrested for “fiscal huachicol”—the practice of smuggling (often stolen) fuel without paying taxes. The hand of the law was swift, critics suspect, because Ruffo is a well-known opposition figure of the right-wing PAN party. Meanwhile, other ruling Morena party governors accused of collaborating with cartels have been left untouched.

Cartel nobbling is one thing, but to president Claudia Sheinbaum, corrupt tax evasion is personal. She has gone to great pains with the progressives in her own party and beyond to argue against passing a progressive fiscal reform. Instead of taxing the rich, she has argued, Mexico should simply charge all the taxes that are evaded.

In the context of this debate, the sheer scale of the fuel theft crisis shows how much money the Mexican State has lost out on through corrupt tax evasion.

The fuel theft investigation continues more vigorously at lower echelons, with prosecutors turning their attention to the Army after scrutinising the Navy for huachicol. Two lieutenant colonels and a lieutenant of the military police who worked on the Matamoros customs office were arrested last week.

Last week’s highlights:

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Uncharted Mexico: Intervention

After falling for 19 months, fixed investment grew for the first time in Mexico. Not only that, it shot up significantly.

Source: INEGI

As always though, there are caveats.

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Uncharted Mexico: It’s the geopolitics, stupid

Structurally, China lies at the heart of Mexico’s surging surplus.

On the demand side, Mexico’s tariffs on many foreign goods, along slowing consumption, has reduced the need to import as much from Asian countries. Meanwhile, on the supply side, exports to the US are booming as Donald Trump’s own trade war with China has allowed Mexico to fill the void.

Non-automotive manufactured exports have been growing at rates of between 20 to 34% month-on-month since late last year.

But the most immediate change in Mexico’s trade balance has a lot to do in the short term with conflict in the Middle East. For the first time in a while, Mexico’s oil exports have been doing pretty well—not in terms of volume but for the high prices it has been able to sell crude and refined petrochemicals for.

All of this is somewhat awkward as USMCA negotiations hang on Trump’s concerns regarding the US trade deficit with its neighbours.

Source: INEGI

Last week’s highlights:

• End of auto pilot—As opposed to most other sectors, the auto industry in Mexico continues to flag.

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

• Google vs Mexico’s tax authority—A judge has exempted Google from having to share user information with the country’s tax authority (SAT). The move has prompted the ruling Morena party to call for expanded rules on digital privacy.
  Since the arrival of president Claudia Sheinbaum to power, the SAT has been on an aggressive collection spree, in the hopes of getting ahold of tax evaders. In 2026, a law was specifically passed to identify those offering digital services without paying tax on their income.

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

• Too big to fail—Concerned about the small size of the applicants to its mixed renewables infrastructure projects, the Mexican government is requiring potential investors to up the size of their bid bonds to $10,000 dollars for every megawatt they seek to offer. The condition is for applicants to prove their solvency given the large cashflows, time frames, and investments required by these energy projects.
  These include plans for up to 15 new wind farms that need to be up and running by 2030 at the latest and which will require a capital injection estimated at $5 billion dollars.

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Uncharted Mexico: Lies, damned lies, and employment stats

The Mexico Political Economist has previously been rather negative about Mexico’s positive job growth late last year. The addition of gig workers with no access to the benefits of formal employment to the government’s statistics seemed less like job creation and more like a technicality.

The shoe is now on the other foot. Monthly job creation fell in May for the first time this year. The shrinkage was not precipitous and for the country with the lowest unemployment rate in the OECD, it’s more of a warning shot, but there was also good news hidden in the stats.

Source: IMSS

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

• Olinia—Many doubted it could be done with such a small budget and in so little time, but the Mexican government-backed electric vehicle (EV), Olinia, was presented yesterday by president Claudia Sheinbaum, as promised, on the eve of the World Cup.
  The boxy vehicle is not meant to compete with Chinese or US EVs, like BYD or Tesla, but rather it is to be in a category of its own:

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

• Slim pickings—Last week’s EU trade treaty signature was followed by a €3 billion euro ($3.5 billion dollar) promise to finance future infrastructure projects by the European Investment Bank. Pharmaceutical companies also got together to pledge $1.2 billion dollars in research, medical devices, and strengthening local production. And Carlos Slim sat down for his annual press conference and said he too would be plugging $5 billion dollars into the Mexican economy—mainly in the energy sector.
  These investments have the domestic market in their sights, as ongoing trade talks with the US continue to depress export-driven investment in the country.

• No news is good news?—The only conclusion of the first round of USMCA

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

• INEligibility rules—President Claudia Sheinbaum has put forth a bill that would have Mexico’s independent electoral agency (INE) do the due diligence behind political parties’ candidates. INE will have access to

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

• More power to them—The Energy Ministry has continued its call for private investment in electricity generation. Another round of contracts was announced, and for the first time energy storage was put up to bid. Renewables were also up for grabs, confirming that the aim to increase green energy generation from 24% to 38% by 2030 falls almost entirely on the private sector’s shoulders despite the law saying the State must control 54% of electric generation.

• Judicial reform reform—The government has confirmed that the “second half”

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

• That’s a wrap!—Thank you to all those who sent in applications for The Mexico Political Economist’s Project Lead position. Watch this space as we look forward to launching the Plan México Project.

• Mexico-Canada Strong—Mexico’s Economy Secretary assured a Canadian audience that bilateral trade would remain free—despite ongoing threats from the US. Both countries promised to not fray in their common push to preserve the US-Mexico-Canada Agreement (USMCA).
  These declarations of mutual affection occurred during a Mexican reciprocal trade mission to Canada. There, over 200 businesses signed a wide spread of

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

• Applications close today—Send yours for an opportunity to become The Mexico Political Economist’s Project Lead for the Plan Mexico Project.

• And in with the new—Technically, the nation’s president was not meant to be a protagonist at the ruling Morena party’s national congress last week. Claudia Sheinbaum resigned from it on ascending to power. Yet, her fingerprints could be seen across the party’s new leadership election:

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

• Have you told your friends?—The Mexico Political Economist is still looking to recruit Project Lead for the Plan Mexico Project. Have a look at the Job description and apply before May 5th.

• Tier-two takedown—El Mencho, the boss of Mexico’s most powerful cartel, was captured and killed in February. Now Mexican forces have successfully moved to capture El Mencho’s lieutenant—and possible successor—that got away.

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

• The clock is ticking!—Don’t miss your chance to join The Mexico Political Economist team. Here’s the Job description. Applications close on May 5th.
  

• Pemex-gate after Pemex-gate—It is now a well-known dynamic: Outrage at any accusation of wrongdoing followed by bewilderment that the accusations ended up being true. This is yet again the state of Pemex, Mexico’s State-run oil company, as it revealed that

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

• The Mexico Political Economist is hiring—Had you not heard? Take a look at the job description. Perhaps you’ll become our next Project Lead! Applications close on May 5th.

• Guilty until proven innocent—The news about fracking overshadowed what in most other moments would have been by far the biggest news—and debate—of the week.

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Last week’s highlights:

• Own goal—The US Trade Representative’s office has handed in its yearly assessment on trade barriers by foreign countries. The section dealing with Mexico, the United States’ biggest commercial partner, is substantially bigger this year round.

  
  The complaints feature many of the now perennial problems the US has with Mexico, like the lack of a fair regulatory system or limitations to investment in the energy sector. This year saw complaints completely lacking in self-awareness too:
  

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MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Uncharted Mexico: Building bridges with the private sector

Private investment in construction has not done well under Morena governments, in power since 2018.

Source: INEGI

The big spike in the graph comes from substantial end of term investment by Andrés Manuel López Obrador in the lead up to the 2024 elections. Once public investment was gone, construction collapsed once again.

This year has seen marginally better news with a noticeable rebound that has stopped the investment hemorrhage. The only issue is it has been driven by public spending once again but by a government that has made it clear that it wants the private sector to pick up the slack.

This is where a recently announced “infrastructure bill” sent to Congress comes into play. It aims to make the big infrastructure stimulus plan announced by the government last month a reality.

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