According to Banamex analysts, President Donald Trump has lost credibility after pausing tariff measures against Mexico. Sergio Kurzcyn, the bank's director of economic studies, mentioned that markets have not reacted strongly to the tariff threats, reflecting a lack of trust in Trump. Kurzcyn pointed out that markets are operating under the assumption that tariffs will not be imposed and that Trump’s attention to market responses influenced his decision to soften trade measures, especially after the decline in U.S. stock markets, particularly in automotive stocks.
Despite the lack of credibility in the markets, analysts warn that the damage is already done due to the impact on market certainty, especially regarding the USMCA. Kurzcyn now projects zero growth for 2025. The uncertainty generated by Trump’s threats is affecting market confidence, which could influence investment.
The analysts' statements came shortly after Trump and President Claudia Sheinbaum announced a new pause on tariffs until April 2. Banamex rules out the application of tariffs over an extended period. Despite the pause in tariff threats, the financial institution adjusted its growth forecast to zero for this year.
The forecast also takes into account the uncertainty generated locally by recent reforms in Mexico, high interest rates, and last year’s fiscal policy. Banamex economists will be attentive to the pre-criteria of the Ministry of Finance and Public Credit (SHCP) to generate certainty in the economic environment.
According to analysts, to restore certainty and reassure businessmen, consistent and credible adjustments aligned with current growth and deficit goals are needed. A tax reform is considered to be well received by rating agencies and would help close economic gaps. Although it is not the main scenario, it is estimated that if tariffs are applied for three months, GDP could fall by 0.6%, and if maintained for a year, the decline could reach up to 2.4%.
