Trip Notes: Mexico City

I was just in Mexico City for client meetings. The City - and the largest Mexican institutional investors there — are vibrant and confident as Mexico is seeing a boom in manufacturing and has become the US’s largest trading partner - dislodging China for the role.

I was particularly struck by how politically focused local investors are in the upcoming Mexican elections. While most believe Claudia Sheinbaum is on track to a fairly easy election replacing her mentor, Andrés Manuel López Obrador (AMLO), there is a sense that the campaign by her opponent, Xóchitl Gálvez, is pushing Sheinbaum to be more responsive to international investors concerns over AMLO’s erratic economic policies.

Additionally, I found tremendous concern and confusion over the US presidential election outlook. In my numerous client meetings, there were constant questions of “How could America want to return to a face-off between an aged and tired Biden and Trump with all his legal problems and behavior issues?” There are no good answers to those questions.

There was a lot of focus on the USMCA and its likelihood to be reviewed in 2026 and what would a re-elected Trump possibly do to the deal. My view is this is Trump’s “ Baby” and, to put it simple terms, no one is going to say his baby is ugly and needs to be fixed in any serious way. There will likely be tweaks of some sort but not an outright reversal away from the agreement.

As for a re-elected Biden, clearly, there will be a strong effort to address labor concerns that have emerged since the deal was inked. Notably, the Biden Administration has aggressively gone to bat for organized labor in pushing Mexico on greater labor representation - to the point of being accused of simply doing Big Labor’s bidding.

Finally, we would note both President Biden and former President Trump visited the U.S -Mexican border while we were in Mexico City. Our assessment of the collective view of Mexicans we met with is bewilderment at the U.S. border policy - and more than a hint of anger as the Biden Open Border Policy has created a crisis within Mexico as it has become a highway for migrants coming from the Northern Triangle, Venezuela, and everywhere else in the world. This was born out visibly by the large number of homeless we saw in the City, many of them Haitian and other nationalities.