Daily: Mexico Economic 16.12.2025

TODAY'S BOTTOM LINE: How Today's Updates Affect You

Mexico launched an antidumping probe into US pork leg and shoulder imports after five domestic producers alleged 32.1% price undervaluation—potential tit-for-tat response to Trump's 20.91% tomato duties imposed on July 2025. Citigroup closed the sale of 25% Banamex stake to Fernando Chico Pardo at MX$42 billion, reducing foreign banking dominance while creating Mexico's largest domestically-controlled financial institution. India proposed a preferential trade deal with Mexico to offset January tariffs for non-FTA countries in Asia affecting US$2 billion in auto exports. The pork investigation signals Mexico will use trade defense tools as negotiating leverage ahead of USMCA review while the Banamex transition under local ownership creates partnership opportunities during the transition period.

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FEATURED STORY

Mexico Launches Antidumping Investigation Into US Pork Imports—Five Producers Allege 32.1% Price Undervaluation in Potential Retaliation for Tomato Duties

Details | The Economy Ministry announced on December 16 the initiation of an antidumping and antisubsidy investigation into imports of pork leg and shoulder from the US. The resolution, published in the government's Official Gazette (DOF), was requested by five Mexican companies: Alimentos Kowi, Alimentos Soles, Comercializadora Porcícola Mexicana, Proteína Animal, and Sonora Agropecuaria, which collectively represent over 65% of national production. The Ministry noted that between 2022 and 2024, Mexico's apparent national consumption of pork grew 8% while imports rose 10%, raising market distortion concerns. The petitioners provided data showing US import prices were significantly undervalued compared to national prices, with margins averaging 32.1% during the analyzed period. US imports account for 86% of total pork leg and shoulder entering Mexico. Interested parties, including US exporters and the government, have 23 business days to respond and submit evidence.

Analysis | The investigation comes six months after the US Commerce Department imposed a 20.91% antidumping tariff on Mexican fresh tomatoes in July 2025, terminating a 2019 Suspension Agreement. Experts note the timing and structure suggest this isn't purely about pork economics—it's a negotiating tool ahead of the USMCA review. The petitioners' claim that US producers benefit from corn and soy subsidies throughout the supply chain addresses a real trade imbalance but also creates leverage in bilateral agricultural talks. Companies should begin scenario planning for 20-30% duty ranges based on the tomato precedent and stated 32.1% undervaluation margin, while also considering that the investigation could be withdrawn if US authorities offer concessions on tomato duties or other agricultural issues before the probe concludes.

CORPORATE & MARKETS

Citigroup Closes Sale of 25% Banamex Stake to Fernando Chico Pardo for MX$42B, as Mexico Reduces Foreign Banking Control

Details | Citigroup announced the closing of the sale of 25% of Grupo Financiero Banamex to Mexican businessman Fernando Chico Pardo and his family, following approval from Mexico's financial and competition regulators. The transaction involved approximately 520 million shares valued at MX$42 billion (US$2.3 billion), at 0.8 times book value. Chico Pardo immediately assumed the presidency of Banamex's Board of Directors, while Manuel Romo remains CEO of the financial group and Ignacio Deschamps continues as president of Banco Nacional de México. Citi CEO Jane Fraser stated that the divestment aligns with Citi's global strategy to exit consumer banking in Mexico and focus on institutional clients, while ensuring Banamex's continuity under prominent local leadership.

Analysis | The 0.8x book value reflects Banamex's reputational damage from past tax disputes and competitive pressure from digital banks like Nu and Mercado Pago that have captured significant retail market share. Chico Pardo brings infrastructure and finance expertise from his tenure at Inbursa (where he was a close ally of Mexico's top businessman Carlos Slim), potentially stabilizing governance during the restructuring phase required before the planned 2026 IPO. The transaction reduces foreign dominance in Mexico's banking system—a long-standing regulatory concern—while creating the country's largest domestically-controlled financial institution. The transition creates a 6-12 month window of operational uncertainty as Chico Pardo reshapes strategy and potentially adjusts credit policies, product offerings, and relationship management structures. Companies with significant Banamex exposure should diversify banking relationships and prepare for possible service disruptions during integration.

MONETARY & FISCAL POLICY

Private Analysts Project 1.15% Growth in 2026, Cite Governance as Primary Obstacle

Details | Mexico's Central Bank (Banxico) released its latest survey of 41 private-sector analysts, projecting the economy will grow 1.15% in 2026 and 1.85% in 2027, compared to 0.39% forecast for 2025. The survey shows formal job creation is expected to reach 308,000 positions in 2026, exceeding the 237,000 projected for the current year. However, analysts identified governance as the main obstacle to growth in the next six months, cited by 44% of respondents. Public insecurity, domestic economic conditions (26%), and external economic factors (25%) were also flagged as significant concerns. Despite these challenges, 64% of respondents anticipate the business climate will "remain the same" over the next six months. Inflation is expected to hover around 3.70% in 2027 and 2028, slightly above Banxico's 3% target.

Analysis | The projected tripling of growth from 0.39% to 1.15% assumes USMCA renewal and stable US-Mexico trade relations, but the 44% citing governance as the top constraint reveals deeper concerns about institutional predictability under Sheinbaum's administration. The reference to "governance" encompasses judicial independence erosion from recent constitutional reforms, regulatory body consolidation, and perceived politicization of enforcement institutions like the Attorney General's office. For multinationals, this creates a compliance dilemma: regulations can shift rapidly without adequate consultation, exemplified by the vape ban, water law, and Asian tariff package all passing within six weeks using MORENA's congressional supermajority. The 1.85% growth projection for 2027 still falls below Mexico's 2000-2019 historical average of 1.8% and well short of the 3-4% needed for significant employment expansion and poverty reduction, suggesting structural headwinds persist beyond cyclical weakness.

TRADE & COMMERCE

India Proposes Preferential Trade Agreement to Offset January Tariffs

Details | India's Commerce Secretary Rajesh Agrawal proposed a preferential trade agreement with Mexico to mitigate the effects of newly approved tariffs of up to 50% on imports from countries without free trade agreements. The proposal was presented during a meeting with Mexico's Deputy Foreign Trade Minister Luis Rosendo Gutiérrez as part of ongoing technical discussions. According to WTO data, Mexico recorded a US$7.97 billion trade deficit with India in 2024. Agrawal stated that the tariffs, set to take effect in January 2026, could negatively affect Indian exports valued at US$2 billion, in the automotive and auto parts sectors.

Analysis | India's quick diplomatic response—proposing a preferential deal just weeks after tariff approval—demonstrates the measure's effectiveness in forcing trade partners to negotiate rather than simply absorbing duties. The US$7.97 billion deficit India runs with Mexico gives both countries incentives to find a solution: Mexico wants to reduce the imbalance, India wants to preserve market access. For procurement teams sourcing Indian automotive components, electronics, or pharmaceuticals, the preferential deal negotiations create a 3-6 month window where import strategies remain uncertain—companies should delay major sourcing commitments until clarity emerges on whether India secures tariff reductions and which product categories receive favorable treatment. The rapid succession of trade proposals from India, Brazil, and China's continued investment pledges despite tariffs suggests Mexico's approach is achieving its stated goal of forcing negotiations rather than accepting asymmetric trade relationships.

REGULATORY & LEGAL

Economy Minister Ebrard Defends Asian Tariffs as Job Protection Measure—Sheinbaum Dismisses Inflationary Concerns Ahead of January 1 Implementation

Details | During the President Sheinbaum's morning press conference, Economy Minister Marcelo Ebrard confirmed Mexico will impose import tariffs ranging from 10% to 50% on products from China, South Korea, Vietnam, and other countries without trade agreements, beginning January 1, 2026. Ebrard stated the measure aims to safeguard 350,000 jobs in strategic sectors such as automotive, steel, textiles, and footwear, particularly in states like Guanajuato, Aguascalientes, and Nuevo León. He said the tariffs are not politically targeted but designed to balance trade, noting Mexico imports ten times more from Asia than it exports. President Sheinbaum added that current inflationary pressures are unrelated to tariffs, attributing them instead to internal and external macroeconomic factors.

Analysis | For retailers and importers, January 1 implementation means fourth-quarter inventory decisions have immediate P&L impact—companies that accelerated December purchases of Chinese goods before tariffs will gain 6-12 month competitive advantages over rivals who must absorb the new duties. The emphasis on protecting 350,000 jobs in specific states (Guanajuato, Aguascalientes, Nuevo León) reveals electoral calculations, as these are key manufacturing centers where MORENA needs to maintain support ahead of 2027 state elections.

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QUICK HITS: 5 More Updates Worth Tracking

1 / French Alstom Wins Railway Contract for 47 Trains – The Railway Regulatory Transport Agency (ARTF) awarded French manufacturer Alstom the bid to construct 47 trains at its Ciudad Sahagún, Hidalgo facility, undercutting Spain's CAF and China's CRRC by 16%, with five-year maintenance commitment.

2/ Televisa and AT&T Evaluate Telecom Merger Creating Second-Largest Operator – Televisa has begun talks to acquire AT&T's Mexican cellular operation, potentially combining 44 million access points across residential and mobile services, subject to a new National Antitrust Commission (CNA) review.

3/ State Oil Company PEMEX Allocates MX$395B for 2025 Production Stabilization – Director Víctor Rodríguez announced an investment plan targeting 1.8 million barrels daily output, having deployed MX$205 billion through November in line with the Lower House-approved budget.

4/ Coparmex Warns 31 States Increased Taxes Weakening SME Competitiveness – Confederation president Juan José Sierra Álvarez reported payroll tax hikes across nearly all states threaten to push micro and small businesses to relocate to lower-tax jurisdictions or neighboring countries.

5/ Finance Ministry Orders 270 Digital Platforms to Share Real-Time Data – SHCP announced permanent online access requirement for digital platforms following the Federal Tax Code reform aimed at improving VAT collection efficiency, though experts flag privacy concerns.