The impact of a second Trump presidency on Mexico’s economy would depend to a large extent on whether the USMCA deal remains intact or Mexico finds itself subject to US import tariffs. If the latter, Mexico would be one of the most affected EMs. And even in the former, Mexico’s trading relationship with the US is likely to encounter more friction given Trump’s broader focus on border security. That is likely to dent optimism about near-shoring in Mexico – and investment inflows into the country. Higher US import tariffs and a strong dollar environment could lead to sharp falls in the peso and higher interest rates than would otherwise be the case.
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