The Big News Breakdown. Unpacking this week’s most important news.

Blithely ignorant of the lessons of previous crashes and blinded by the promise of new technology, US entrepreneurs poured their resources into exponential expansion. When they ran out of money, they borrowed it in ever-growing sums. When the US market became too constraining, the investors turned their eye to Mexico.

The pattern of tech bubbles is so consistent that the playbook of the railway tycoons of the late 19th century sounds strikingly similar today. Railway infrastructure spilled over into northern Mexico as the US robber barons of the Gilded Age ran out of space across the enormity of the continental United States.

As the globe undergoes a new technological boom, Mexico has become a different sort of actor under the aegis of artificial intelligence. It’s no longer just a site for building the new technology’s infrastructure—rail back in the late 19th century, data centres in the early 21st—it is also where funds and asset managers have come looking for fresh capital.

Read more

The Big News Breakdown. Unpacking this week’s most important news.

It would be a mistake to try and declare a definitive souring of US-Mexico relations through one off week.

This bilateral diplomatic relationship is a delicate dance that must be balanced with other considerations. So, when president Claudia Sheinbaum accused the US of trying to meddle in Mexican internal affairs, she was indeed reacting to the actual moves by US law enforcement linking members of her Morena party to cartels. But she was equally trying to keep her left-wing nationalist party united in the face of foreign right-wing pressure.

The US government clearly didn’t see her fiery language as the opening shots in a new US-Mexico conflict. In fact, the Trump administration, instead of shooting back, has recently gone out of its way to talk up bilateral security cooperation.

The following gushing statements that were released over the past week to this effect:

Read more

The Big News Breakdown. Unpacking this week’s most important news.

It was president Claudia Sheinbaum’s earliest triumphal moment. Just days after Donald Trump had threatened Mexico with sweeping tariffs (for the first time), the US president walked them back, giving the Mexican president an excuse to celebrate with a massive rally at Mexico City’s most important civic centre, the Zocalo.

What most political analysts remembered from that day, though, was an unfortunate moment in which Sheinbaum’s rivals and hangers-on within the ruling Morena party literally turned their backs on the president to take a photo amongst themselves.

It was likely a simple mistake but the symbolism was not lost on observers. The president who had succeeded Andrés Manuel López Obrador, the all-powerful founder of Morena, looked like a political minnow in comparison; unable to control her former political rivals and unable to pass her own legislative agenda.

That was March 2025. Today, all those politicians are no more—or they are at least much diminished from the empowered state they found themselves in just over a year ago. Each one has since been demoted or booted out from a powerful job. Claudia Sheinbaum has imposed her authority after a reshuffle that began in early April and ended last week.

Read more

The Big News Breakdown. Unpacking this week’s most important news.

It has been the most underrated trade news development in Mexico for years—probably because it went to plan and without a hitch.

Last week, European Union officials—including president of the European Commission Ursula Von der Leyen—arrived in Mexico City to sign an update of the comprehensive EU-Mexico trade treaty, the Modernised Global Agreement.

It looked and felt like a triumph of the free trade partnerships of years past. The updated treaty now allows 99% of products to be tariff free—including Mexican agricultural exports that EU protectionism held back in the original agreement signed in 2000.

Read more

The Big News Breakdown. Unpacking this week’s most important news.

Two of the Mexican politicians indicted by the US for allegedly working for the Sinaloa cartel have voluntarily handed themselves over. Former Sinaloa security secretary Gerardo Mérida Sánchez and finance secretary Enrique Díaz surrendered to US authorities to collaborate in their investigations against close to a dozen Mexican politicians including Rubén Rocha Moya—until recently the governor of the state of Sinaloa.

They have been accused of facilitating the criminal enterprise of the family of Joaquín “El Chapo” Guzmán—who is also cooperating with US authorities from his cell in New York. By walking into US custody, both the accused seem to be betting on softer sentences in exchange for information.

The turn of events changes things dramatically for the government of president Claudia Sheinbaum.

The debates around extradition and whether Sheinbaum has the political will to go through with handing over her own party members are moot as the accused willingly crossed the border. The question that now emerges is how the president will react as the evidence against the rest of the accused piles up.

Read more

The Big News Breakdown. Unpacking this week’s most important news.

The Mexican economy is shrinking. Job creation is nowhere near the rates needed to keep unemployment down or underemployment at bay.

Against economic logic, consumption is still up. The argument that a higher minimum wage may be buoying consumption is losing currency as the big increases of the past fade into the distance. Indeed, for a while now higher wages have had the peculiar effect of boosting retail sales while keeping profits low.

Consumption is cooling, just not at the rate expected given the economic slowdown. Beyond the minimum wage, another trend seems to explain this effect.

In the first three months of 2026, consumer credit went up by 7.2%. Car sales were also up—by 3.7%—but it was the car loans that were really booming—they grew by 11.2% in the first quarter of 2026.

Traditionally, financial institutions did not give credit to the average Mexican. Banks seem to be loosening their previous standards—AI and hyper-personalisation of products are given as the reason for which they are taking greater risks. There seems to be another big reason for Mexico’s sudden boost in consumer credit.

Read more

The Big News Breakdown. Unpacking this week’s most important news.

Speculation is at a high as the governor of Sinaloa Ruben Rocha Moya, along with the mayor of its capital and a federal senator from the northwestern state, were issued indictments by the US. In total, 10 current and former Mexican officials have been charged with drug trafficking and weapons offenses in league with the Sinaloa cartel.

In a rush to fill up newspapers with content, analysts in Mexico have overthought the political machinations in the US concerning this case. Some predict that Trump is behind the indictment; a step in his plan to “do a Maduro” on Mexican soil. Others say it is a ploy to get the Mexican government to bend the knee lest it justify an excuse for direct US intervention against cartels.

Though one mustn’t discard even the most outlandish options with the Trump administration, in all likelihood the truth is that the Southern District Court of New York has most likely been working on this case since the Biden administration whisked one of the main bosses of the Sinaloa cartel into US custody. It is well known that this kingpin, along with prominent criminal leaders such as El Chapo, have been feeding information to investigators.

Despite the Mexican government’s rejection of the indictment on the ground that it doesn’t present enough evidence against ruling Morena party-affiliated politicians, it is likely that the case is tight enough to warrant going after such high profile foreign figures.

The slow bureaucratic gears of US justice have finally churned out a decisive conclusion. The ball is now in the court of Mexico’s even slower judicial machinery. The possible outcomes depend on a few convoluted but limited paths:

Read more

The Big News Breakdown. Unpacking this week’s most important news.

Tariffs on steel for heavy-duty vehicles from Mexico to the US will be halved from 50% to 25%. The tax has been one of Donald Trump’s biggest trade war blows against his neighbours, so Mexican industry is celebrating. The joy might be short-lived.

The Mexico Political Economist predicted that steel tariffs would hurt the very industry that Trump was trying to protect—the US auto industry. A year later, reports began to emerge that higher duties were putting the sector, and particularly heavy-duty truck makers, at a competitive disadvantage… with Mexican truck manufacturers.

Tariffs on trucks followed, which in turn saw the devastation of the Mexican heavy-vehicle manufacturing sector.

So, while the tariff relief on steel may seem like good news for Mexico, the conditions set by the US to qualify send worrying signals. It is a new policy that is both a recognition of how the US auto industry is inextricably linked with Mexico’s and one which seeks to remedy and reverse this dependence.

Read more

The Big News Breakdown. Unpacking this week’s most important news.

The ascent of Roberto Velasco to Foreign Minister dominated the conversation two weeks ago. And rightly so: His arrival at the Foreign Office marked a generational shift and showed what sort of figure president Claudia Sheinbaum wants in her government, particularly when facing the Trump administration.

A departure from a relatively more minor office of State to an undefined role understandably got far less coverage. But perhaps it shouldn’t have, given that it may define the future of Mexican politics for years to come even more than the current Foreign Secretary.

Read more

The Big News Breakdown. Unpacking this week’s most important news.

Mexico had placed the noose of natural gas dependency around its neck long before conflict with Iran strangled global hydrocarbon supplies. The country generates most of its electricity by burning natural gas, of which 75% is imported from the United States. The age of economic warfare must have had an effect on Claudia Sheinbaum’s government because last week the president announced that Mexico would now allow fracking.

It is a substantial—and rare—U-turn from her own and her predecessor’s policy.

Sheinbaum officials had been mulling the move for some time now, so the green light wasn’t all too surprising. What did raise eyebrows was how the Mexican government will try to square all of its aims.

When it comes to fracking, Sheinbaum said she intends to:

Read more

The Big News Breakdown. Unpacking this week’s most important news.

It’s a song and dance as old as time: When a President names a trusted figure who is not a career diplomat to high office, the procession of disapproving sounds from critics who bemoan the hollowing out of the foreign service follows inevitably.

Thus it was last week, when Roberto Velasco was named Mexico’s newest Foreign Minister. His youth, coupled with his meteoric rise baited critics who were already displeased by the fact that 38-year-old Velasco is not a career diplomat.

“A course isn’t enough,” decried one op-ed, referring to the course political appointees to top diplomatic positions get at Mexico’s prestigious foreign affairs academy, the Matías Romero Institute. Its mere existence suggests that this isn’t the first time this course has been needed to polish up the skills of amateur ambassadors-to-be.

Something is actually different this time though. Luckily for Velasco, in the age of Trump, previous handicaps may well now be advantages.

Read more

Holy Week is slightly after Spring Break in the United States, making these weeks the first big travel spike of the year after the January and February slowdown. Yet, just as Semana Santa shifts depending on the liturgical calendar from late March to late April, who goes where is also affected by tidal economic and social forces.

Read more

The Big News Breakdown. Unpacking this week’s most important news.

The yearly gathering of Mexico’s bankers has always hosted Mexican government officials. This time the feeling was different—and not in the way described last year with the arrival of a freshly-minted president Claudia Sheinbaum, whose administration has been seen as more pro-business than her predecessor’s.

The difference is one of tension—but in a good way, Fernando Gamez Carrillo, a compliance and risk manager in the Mexican banking sector, told The Mexico Political Economist.

“Both sides are challenging each other—in a good way. There is a sense of mutual responsibility,“ he said.

For first time it feels like both sides actually want to talk to each other. The resulting conversations consequently feel more like negotiations. Both sides agree the direction they want the country to go in—towards more investment and economic growth. It is the way each wants to get there that they are currently working out.

To get there, the Mexican banking sector had to wrestle with three fundamental questions at this year’s Banking Convention in Cancún:

Read more

The Big News Breakdown. Unpacking this week’s most important news.

Former president Andrés Manuel López Obrador (2018-2024) is the most powerful Mexican politician in living memory. He also has kept relatively quiet since he left office, promising to reemerge only when it mattered. This has only happened thrice: To support Mexico’s unprecedented judicial election, to shill for his recently published book, and to raise funds for Cuba.

“I’ve retired, but it hurts me to see how they’re seeking to exterminate our Cuban brothers for their ideals of freedom and the defense of their sovereignty,” tweeted out López Obrador before sharing a set of bank details.

This was so surprising that many thought López Obrador’s Twitter account may have been hacked. The format of the plea certainly seemed like a scam: An exhortation to donate money on behalf of the Cuban people to a private Mexican bank account.

The account was later found to be legitimate—allegedly linked to an organisation run by a close political ally. But the question as to why this powerful former president had emerged from his political slumber, after far more dramatic moments on the domestic front, remained.

Read more

The Big News Breakdown. Unpacking this week’s most important news.

The Mexican Economy Ministry and the US Trade Representative (USTR) have announced the first round of talks for the Joint Review of the US-Mexico-Canada Agreement (USMCA). Kick off is set for March 16.

But wait, haven’t Mexico and the US been talking for months at this point?

Especially with the Trump administration’s volleys of tariffs against Mexico since February of last year, Mexican functionaries have been in close and constant talks with their US (and Canadian) counterparts. Economy secretary Marcelo Ebrard is in Washington on a weekly basis.

This is all true, but with the official start to the review, two things will now change—one as expected, the other in ways that were recently revealed.

Read more

The Big News Breakdown. Unpacking this week’s most important news.

It was a well-known song and dance. The government of president Claudia Sheinbaum lauded Mexico’s investment figures for 2025, declaring they were at “historic highs.” Opponents howled in response, calling out what they said were “awful numbers.” On both their screens, sat a pretty boring bar graph—slowly sloping upwards. It would seem nothing to write home about either way.

The explanation without the political spin is this:

Read more

The Big News Breakdown. Unpacking this week’s most important news.

El Chapo captured Hollywood’s imagination but, as of late, it seemed like Nemesio Oseguera Cervantes—a more discrete criminal kingpin known as El Mencho—had captured Mexican crime.

The 59-year-old head of the Cartel Jalisco Nueva Generación (CJNG) turned a drug cartel born in Western Mexico into a country-spanning criminal enterprise. And, as powerful organisations under El Chapo and El Mayo Zambada waned, it became clear that CJNG would either have to be taken on by the Mexican government or it would take over Mexico.

Yesterday, the Sheinbaum administration struck. A military deployment sought to surround and detain the cartel’s top boss. In the ensuing firefight, El Mencho was hit and died of his wounds in a military aircraft after having been captured by Mexico’s armed forces.

Top US government officials immediately cheered the killing of the cartel boss with a $15 million dollar bounty on his head. The media proclaimed it “a victory” for the Mexican government.

The Mexican government has kept far more quiet. It is suggestive that it knows this is just the beginning, and that things could get bad in the coming days and weeks.

Read more

The Big News Breakdown. Unpacking this week’s most important news.

After much delay, a proposal to reduce the legal length of Mexico’s working week is crawling through Congress. The comparison is stark: The ruling Morena party and its allies hold a decisive super-majority, which passed far more controversial constitutional reforms—most notably the one that revolutionised the country’s justice system—have been known to pass practically overnight.

This particular reform dragging workers’ rights into the 21st century should have been an easy one for the political movement that doubled the minimum wage. Yet the governing coalition has dithered to no end. The answer as to why is simple enough:

Political necessity is getting in the way of an increasingly obvious economic truth.

Economies of reason

Start with the basic facts of the proposed bill. The two big changes on the table are to bring the working week down from 48 to 40 hours, and to give Mexicans an extra day off. Mind you, this would barely give workers a two day weekend. All this as other countries experiment with the four-day week.

Read more

Operation Swarm is back. It was initially showcased months ago as the new way in which Claudia Sheinbaum’s government would be tackling organised crime. It took a proactive, intelligence-based approach in investigating not just cartels generally, but the government officials who were actively working with criminals.

The first Swarm sting was carried out in the State of Mexico, with close collaboration between Mexico’s national civilian and military forces alongside the state’s own law enforcement.

Beyond sharing a name, this iteration of the operation in Jalisco felt markedly different. Its differences from the first time it was deployed reveals the worrying truths about criminal infiltration into the government.

Read more

The Big News Breakdown. Unpacking this week’s most important news.

The Mexican government has been on a charm offensive with Mexico’s biggest lenders. Financial institutions of all kinds—from old global banks, like HSBC, to local fintechs—were summoned first by Mexico’s President and then by her Economy Secretary to drum up more investment in the country.

Their request to the banks was an old one: Lend more to Mexicans. Indeed, credit in Mexico is substantially lower even than in other, less developed economies. This, in turn, has limited economic growth in a country where big investors are waiting in the wings for geo-political turbulence to pass and where the government is reluctant to increase public spending.

Credit is consequently what’s needed, and especially for those small and medium enterprises (SMEs) that struggle to get any loans whatsoever. President Claudia Sheinbaum went as far as to complain that, in other countries, SMEs are offered credit even if it is at extortionate rates… but at least they have access to it.

The usual steps are being taken to increase lending rates. Red tape is being cut and financial institutions are getting more backing to take higher risk bets on SMEs.

Konfío, a smallish fintech compared to the banking titans in the room, pledged to lend $2.5 billion dollars to SMEs from 2026 and 2028. (Perhaps a clever way of speeding the approval of its banking licence). Larger institutions said “big announcements” would be made this week.

The government is taking these steps in the face of growing economic headwinds. Despite taking a more business friendly approach than her predecessor, during her watch Sheinbaum has seen year-on-year loan rates fall.

Source: Bank of Mexico

Going for broke on the basics

Despite good feelings and optimistic words by the bankers, the government is still expected to lead in these economically uncertain times.

Consequently, Mexico’s government and State development banks are being asked to take the lead. The promise is, behind them, will come backing for essential projects.

The bankers’ meeting with the president promised core infrastructure investments, including electricity transmission and renewables (which may have already been in the pipeline given that 2026 saw the coming into force of the country’s new Electricity Reform). There was also mention of roads and trains.

There is still a large missing middle. The big government investments being backed by the banks are essential but nevertheless means to an end—roads to move products; electricity to manufacture them. There still need to be big investments by companies actually producing the goods to make and move around.

Despite the government promise to give credit access to at least 30% of the country’s SMEs by 2030, smaller businesses simply won’t be able to fill in the missing growth Mexico needs in the short and medium term.

Once again, a lack of specificity as to where the government’s industrial priorities lie was a complaint among investors. “My worry is that little gets done in these forums with so many people,” a banker from a global financial institution told The Mexico Political Economist.