Mexico Weighs Judicial Reform Delay, Credit Downgrade Risk

A new reform seeks to delay Mexico's second judicial election from 2027 to 2028, cut candidate numbers, and tighten screening. In addition, S&P Global Ratings’ negative outlook on Mexico raises risk of a downgrade by Moody's Ratings in 1H26, analysts say.

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Mexico Moves to Delay Second Judicial Election to 2028

President Claudia Sheinbaum announced she will send a constitutional reform initiative to the Chamber of Deputies to delay Mexico's second judicial election from 2027 to 2028, simplify the candidate selection process, and reduce the number of aspirants on the ballot, as the ruling MORENA party moves to correct flaws exposed by the first round of popular judicial voting held in June 2025.

Mexico Faces Moody’s Downgrade Risk After S&P Outlook Cut

The decision by S&P Global Ratings to revise Mexico’s credit outlook to negative has significantly increased the probability of a formal rating downgrade by Moody’s Ratings in 1H26, according to separate analyses by Banamex Economic Studies, Kapital Grupo Financiero, and Banco Base. S&P’s shift, announced on May 12, aligns the agency with Moody’s, which has maintained a negative outlook on Mexican sovereign debt since November 2024.

Mexico, South Korea Ditch FTA Talks, Pursue Trade Framework

Mexico and South Korea have agreed to negotiate a formal trade and investment framework, stepping back from years of intermittent free trade agreement discussions as both countries navigate tariff tensions and shifting global supply chains. The agreement was formalized in a Joint Ministerial Declaration signed May 12 in Mexico City, where Minister of Economy Marcelo Ebrard and South Korea's Minister of Trade Yeo Han-koo met to review the bilateral economic relationship. 

Mexico Pushes Back Against Excess Capacity Investigation

Mexico formally requested the Office of the United States Trade Representative to be removed from a Section 301 investigation into structural excess capacity in manufacturing sectors. "There is neither a legal nor a factual basis to include Mexico within the scope of this investigation," Mexico's Ministry of Economy stated in a written communication to the USTR, in response to an investigation opened on March 17, 2026, and published in the Federal Register.

US, China Strike Deals on Agriculture Trade, Aircraft, Minerals

China has agreed to purchase at least US$17 billion in US agricultural goods annually through 2028, buy 200 Boeing aircraft, and address shortages of rare earth minerals, the White House said following a two-day summit between President Donald Trump and Chinese President Xi Jinping in Beijing that concluded on May 15. The two leaders also agreed to meet again in the United States in September.