Mexico is once again caught in the crossfire of a US presidential election. How will new president, Claudia Sheinbaum, navigate the troubled waters of “America First” policies?
As Mexico’s first female president, Claudia Sheinbaum, begins her term in office on October 1, dark clouds are looming on the northern horizon of the Central American country. US Republican presidential hopeful Donald Trump has again plunged Mexico’s economic model of low-cost production for the US market into doubt by calling on companies there to immediately relocate their operations to the United States or face higher tariffs.
Speaking to party members at the Republican National Convention in July, he warned Chinese electric vehicle manufacturers in Mexico that their EVs would become unaffordable due to new duties of 100% he was planning to impose on their imports.
Trump has also called on German automakers, which operate big plants in Mexico, to “become American car companies.”
“I want them to build their plants here,” Trump said during a campaign speech in Savannah, Georgia, on September 24, as he promised them a reduced corporate tax rate of 15%.
Mexico’s robust growth faces political headwinds
Although sworn in on Tuesday, 62-year-old Claudia Sheinbaum’s presidential agenda will only become clear after November 5, when a new US president is elected. Whether it’s going to be Donald Trump or Kamala Harris from the Democratic Party, the outcome of the US election is sure to have a major impact on the Mexican economy.
Left-wing politician Sheinbaum is inheriting a robust economy from her predecessor, mentor, and party ally Andres Manuel Lopez Obrador. Mexico’s gross domestic product (GDP) grew 3.2% last year, marking the second consecutive year of over 3% growth. Official data also shows that the poverty rate fell from 43.9% in 2020 to 36.3% in 2022, with around 8.8 million fewer Mexicans
In recent weeks,however, a judicial reform has sparked national and international controversy. Rushed through institutions at record speed, it has raised concerns among trade partners in the US and Canada. The reform calls for all federal judges to be directly elected by the public, which critics fear could increase the influence of organized crime, which holds significant sway in Mexico, on the judiciary.
US companies have already frozen an estimated $35 billion (€31.6 billion) in investment projects, and Ken Salazar, the US ambassador to Mexico, has voiced his concerns about the potential negative impact on Mexico’s democracy and the $807 billion bilateral trade. Nonetheless, Lopez Obrador pushed through the reform, which he described as a “democratization of the judicial system,” in the final stretch of his presidency.
News SOURCE; DW News
