Economic Uncertainty in Mexico Amid Political Approval

The president of Mexico City, Claudia Sheinbaum, maintains an approval rating of 80%, despite the fact that there are cities in the country living in fear. Economically, despite the uncertainty, there has not been a collapse, as GDP grew in the first quarter of the year and the exchange rate remains relatively stable. The National Banking Convention is taking place in Nayarit, where the most important banks in the country will gather to discuss the reasons behind their strong performance. There is a possibility of having to renegotiate the Free Trade Agreement between Mexico, the United States, and Canada in the coming year, which could require adjustments or even its termination. Regarding trade negotiations, Donald Trump has mentioned that the USMCA is excellent for all countries. However, political risks have risen, and closing trade agreements with Mexico could worsen the situation even further. In terms of the impact on the Mexican economy, there has been a 17% increase in short-term credit demand from Mexicans, which could imply an increase in consumption. It is crucial to pay attention not only to what Trump says but also to his actions during this and the next year. The uncertainty generated by tariffs and trade decisions affects several states in the U.S., such as Washington and California, where the decrease in Mexican and Canadian tourism has wreaked havoc on local small businesses. Trump's unpopularity continues to rise, with only 41% approval among the U.S. population. Meanwhile, in Mexico, fluctuations in tariff policies create a climate of constant uncertainty. The "Beige Book" has collected concerning opinions regarding tariffs, which were mentioned 107 times in the latest edition. Traders show increasing concern about economic uncertainty and the potential negative impacts of these policies on their businesses. The current situation makes it difficult to focus on other issues such as artificial intelligence, as it is necessary to address the implications of ongoing trade decisions. Amid this context, Mexico is forced to deal with a neighbor whose actions may seem irrational.