US Election Results Bring Different Challenges for Mexico

With the US elections approaching, experts suggest that a Democratic victory with Kamala Harris may be more beneficial for Mexico, while a potential Republican win with Donald Trump raises some concerns. However, over the past 32 years, neither party has shown a clear advantage in economic matters, clarify experts.

Mexican leaders and officials are taking a neutral stance on the US elections, anticipating challenges regardless of the outcome. “We are prepared for any scenario. Of course, there are notable differences in communication and policy proposals, but it is essential to recognize that today’s US environment is predominantly protectionist—a significant shift from the past when the US championed free trade,” stated Economy Minister Marcelo Ebrard.

Trade Agreements

Two significant trade agreements—NAFTA and USMCA—originated under Republican administrations. NAFTA, signed in 1992 by George H. W. Bush, took effect in 1994 under Democrat Bill Clinton. USMCA, proposed by Donald Trump, was finalized in 2018 and enacted in July 2020. Both agreements have been crucial for Mexico’s economy, often yielding benefits during Democratic administrations.

When NAFTA took effect in 1994, Mexico’s exports to the US were valued at US$42.9 billion. By the end of Clinton’s presidency in 2000, this figure had increased to US$147.4 billion. Under Barack Obama (2009–2016), exports experienced fluctuations, mainly due to the 2008 financial crisis. During Trump’s presidency, exports remained steady, although they did decline in 2020 because of the COVID-19 pandemic. Under Joe Biden, trade has surged. In 2023, Mexico became the US’ top trading partner, with exports reaching US$490.2 billion.

In 2025, the fifth meeting of the USMCA Free Trade Commission will take place, with the agreement scheduled for review in 2026. Mexican Ambassador to the US, Esteban Moctezuma, clarified that in 2025 there will be no renegotiation, as it is clearly specified that it will be a review allowing the three parties to decide in 2026 whether or not to remain in the agreement.   Experts anticipate that this review will likely address Mexico’s reforms, China’s regional influence, and energy and environmental policies. 

Regarding Donald Trump's statements about raising tariffs on cars manufactured in Mexico, Moctezuma commented that it will not necessarily translate into policy. "During electoral campaigns, a lot of information is released that does not necessarily become real. What they always seek is which public policy will be followed, and that will be seen only once the government is in office,” he explained.

Remittances

Experts point out that another key metric to assess the government's benefits is remittances.  During Clinton’s administration, remittances gradually increased from US$3.3 billion in his first year to US$6.6 billion by the end of his term. Under Bush, remittances to Mexico soared, climbing from US$8.9 billion in 2001 to US$15.1 billion by 2003, exceeding US$26 billion by the end of his presidency. Under Obama, remittances declined due to the 2009 financial crisis. In contrast, during Trump’s presidency, remittances continued to rise, reaching US$41.7 billion by his final year. The Biden administration witnessed record-breaking remittances, reaching a peak of US$63.3 billion in 2023.

Mexican Peso

The United States has consistently exerted a significant influence on the Mexican peso. During President Bush's administration, the peso remained relatively stable, averaging MX$9.34 per dollar and closing at MX$11.14. However, under President Obama, the peso experienced considerable depreciation, averaging MX$13.50 per dollar in 2009 and rising to MX$18.69 by 2016. Despite uncertainties surrounding President Trump’s policies on Mexico and the impact of the pandemic, the peso's decline was comparatively moderate, averaging MX$18.91 per dollar in 2017 and closing at MX$21.50. As of Oct. 29, the exchange rate stands at MX$20.60 per dollar.

Francisco Campos, Chief Economist for Latin America,Deutsche Bank, expressed a cautious outlook on the behavior of the Mexican peso in light of the upcoming US elections. “A Harris victory could trigger a relief rally, bringing the peso below MX$19 per dollar. Conversely, a Trump win, especially a ‘red wave,’ could make the peso reach MX$20.5 per dollar.” 

Campos further noted that all Latin American currencies are likely to respond differently, with broad depreciation expected if Republicans assume office and appreciation if Democrats prevail. However, JPMorgan Analysts Gisela Brant and Tania Escobedo emphasized that the Mexican peso would likely be the most affected by any potential tariffs.

Migration

Upon assuming office with a pledge to adopt a more compassionate approach to immigration, the Biden administration has encountered significant challenges in managing the southern border. Vice President Harris has articulated a plan to impose stricter regulations on asylum claims and to extend restrictions established by the Biden administration regarding asylum access. Harris also advocates for comprehensive immigration reform, proposing pathways to citizenship for undocumented immigrants, particularly those brought to the US as children.  Harris has also leveraged her experience as California’s attorney general, where she examined drug-smuggling tunnels and successfully prosecuted organizations involved in drug and human trafficking. 

In contrast, Trump has committed to initiating the largest deportation campaign in US history if reelected. Although deportations during his previous administration never exceeded 350,000 annually, he now proposes deploying the National Guard for mass migrant apprehensions and invoking the Alien Enemies Act, an 18th-century law that allows the president to deport noncitizens from countries in conflict with the US.

Trump's plans also include revoking protections for hundreds of thousands of immigrants who entered the US under Biden administration programs. He aims to reinstate policies such as the Remain in Mexico program—which mandated that migrants wait in Mexico while their asylum claims were processed—and Title 42— which restricted immigration on public health grounds. He also intends to reintroduce and expand a travel ban that originally targeted several Muslim-majority countries and implement new ideological screenings to prevent entry for individuals deemed extremists or threats. 

According to BBC polls, Harris has maintained a slight lead with 48% compared to Trump’s 47% in national polling averages since she entered the race in July. However, the BBC cautioned that polls can sometimes be inaccurate, as they underestimated Trump’s support in both 2016 and 2020.