For Barclays México, the start of the T-MEC review rounds next week is a positive sign that the trilateral agreement's revision will be successfully concluded in a much shorter timeframe, albeit with some challenges along the way. In a media conference, the bank's chief economist in Mexico explained that there are three central points demanded by the United States, where he believes the Mexican government has delivered results. First is the security issue, specifically the dismantling of fentanyl trafficking. "It will reach a successful conclusion, although with some storms," the analyst also warned, noting that during this period, the T-MEC issue will also be accompanied by "noise." Barclays México forecasts that Mexico's Gross Domestic Product (GDP) will grow by 1.7% this year, which is one of the most optimistic forecasts within the consensus among experts. This projection considers a better performance in the United States of 2.8%, driven by growing investment in Artificial Intelligence, the boost from Trump's fiscal project, a more accommodative monetary policy, and deregulation. In Mexico, the expert also expects some investments to be reactivated as the government has provided more information on public policy; however, another part of investors will await the resolution on T-MEC. Casillas also assured that the market is "pleased" with the Sheinbaum administration for how it has handled its relationship with Trump, its support for Pemex, the lowest debt growth compared to other countries, fiscal consolidation, and maintained the credibility of Banxico. However, he currently ruled out any GDP impact from the infrastructure plan, stating there are no solid details on it yet. Citi estimates financial impacts for Mexico if the conflict in the Middle East lasts more than 6 months. Finally, he noted that the current focus is on events in the Middle East and their duration, which will be key to understanding the effects. "In this scenario, Trump can boast that he is not just someone who disrupts, but also secures deals," Casillas explained. For the Barclays specialist, it is also important that the rounds are starting earlier than estimated, as this allows projecting they will end sooner, possibly before the U.S. midterm elections in early November. In this sense, the economist stated that the government has fulfilled the delivery of key figures wanted by its U.S. counterparts and significant operations, such as the one in Jalisco where "El Mencho," leader of the CJNG, one of the most wanted targets for U.S. authorities, was taken down. The second key issue is migration, stemming irregular transit through Mexico's southern border, and third is China, preventing its trade from jumping tariff barriers and reaching the region. Business leaders call for eliminating uncertainty and tariffs ahead of the T-MEC review. Casillas considered that on all three issues, Mexico has taken decisive actions that it can defend at the negotiating table, although he rejected the possibility of achieving a 0% tariff, as demanded by the automotive, steel, and aluminum industries. For now, his base scenario is that it will be a manageable clash. However, he estimated that an effective tariff of 5% to 8% could persist, which is still a low level compared to other countries. "If it lasts 3 or 4 weeks, there will be peace of mind that nothing will break, but if the conflict lasts longer and crude prices keep rising, we can think that something will break," the analyst said.
