However, he stressed that Mexico would “defend our right” to lithium, a highly sought-after metal that was nationalized in Mexico in 2022.

Last Friday, Ganfeng and two of its subsidiaries, Bacanora Lithium and Sonora Lithium, filed a “request for the institution of arbitration proceedings” with the World Bank’s International Centre for Settlement of Investment Disputes.

The dispute between Ganfeng and Mexico is over the federal government’s cancellation of concessions granted in 2011 for the Chinese company’s proposed Sonora Lithium Project.

Ganfeng told its investors last August that Mexico’s General Directorate of Mines said it had failed to meet minimum investment requirements between 2017 and 2021, resulting in the cancellation of nine lithium mining concessions it held for its project.

The company has asserted that its subsidiaries have presented “ample evidence of their compliance with the minimum investment obligations,” and had in fact “significantly” exceeded them.

At his morning press conference on Thursday, López Obrador acknowledged that there was a dispute over “a few” lithium mining concessions, and said it was the result of the Mexican government’s view that “lithium belongs to the nation.”

He said that the federal government believes that concessions were previously issued in a “generic way, not specifically for lithium, but for mining” in general.

“And we think [Ganfeng’s concessions] don’t apply” for lithium mining, López Obrador said.

Nevertheless, the government will “seek an agreement” with the company, he said.

“Relatively recently, three months ago, the person in charge of Chinese diplomacy was here and I spoke about the issue. There has to be an agreement because lithium was nationalized and we don’t want private companies to participate. Yes, there can be a [public-private] partnership, but with the predominance of the national interest,” López Obrador.

“… That is the only issue we have and we’re going to go to these international panels to defend our right,” he said.

Peter Secker, the UK-based CEO of Bacanora Lithium, said late last year that Ganfeng had formed the view that it was not “legally valid” to cancel the company’s concessions in Sonora. The president of the Mexican Mining Chamber has expressed the same view.

Secker said the company would defend its ownership of the lithium mining concessions, including in Mexican courts. But he also said that Ganfeng was open to forming a joint venture with Mexican authorities to carry out the project in Sonora.

The government created a state-owned lithium company, Litio para México (Lithium for Mexico), but there are significant doubts about its capacity to mine lithium on its own. The potential lithium reserves in Sonora are in clay deposits that are technically difficult and expensive to mine.

“Ganfeng has the money to do this. It’s got the technology, and it has the people to develop this project without any assistance from the government. However, we have had discussions with the government over the last few years and, and we’re happy to work with the government. We just need to sort out their apparent attempt to cancel the licenses,” Secker said last October.

“… It would be silly for the government not to work with Ganfeng to develop a strategy,” he said.

It remains to be seen whether the government will seek to enter into a joint venture with Ganfeng and its subsidiaries.

The Finance Ministry has estimated that lithium reserves in Sonora — where Mexico’s largest potential deposits are located — could be worth as much as US $600 billion. There are smaller deposits in other states including Baja California, San Luis Potosí and Zacatecas.

Lithium is in high demand because it is a key component of lithium-ion batteries for electric vehicles and green energy storage. The alkali metal can thus play an important role in the transition to clean energy.

Based in Shanghai, Ganfeng is one of the world’s leading lithium miners and battery makers.

With reports from El Financiero and Reuters 

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Jesús Carmona, CEO of Schneider Mexico and Central America, recently told the newspaper El Economista that he is bullish on nearshoring, insisting that the impact in Mexico over the next 30 years will be enormous.

“I believe in nearshoring because I see [its impacts] every day,” he said. “The first place to feel its impact was Monterrey, but we see it in other northern cities and in the Bajío [region]. I have no doubt it will reach southern Mexico as well.”

Describing how Schneider’s presence in Mexico doubled between 2021 and 2023, Carmona said there are three reasons for his company’s accelerated growth here: “nearshoring, increasing demand for efficient solutions to electrical energy needs, and the great abilities of Mexican labor.”

Schneider employs 1,600 people across Mexico in 10 plants, with 1,000 of those workers hired in the past four years. Last year, Schneider invested US $72.5 million in its Mexican energy automation services.

At the June 13 inauguration of the new plant known as Monterrey 4, Schneider’s director of operations in North America, Agustín López, said that the new plant in Monterrey — its fourth facility in the northern Mexico city — would strengthen its local economic ecosystem by 17%–20% over the next two to three years. 

“We are always trying to optimize our technological capital via the development of a campus,” he said. “That’s why we build these production centers.”

Monterrey 4 will eventually create 460 jobs (257 people are on the payroll at present) and will be focused on the manufacture of specialized products, such as low-voltage electrical distribution boards — essential for hospitals, data centers; digital companies and organizations with high energy consumption. 

Schneider Electric, which has been operating in Mexico since 1945, specializes in digital automation and energy management by combining energy technologies, real-time automation, software, and services.

The 183,000-square-foot plant will boost the company’s production in North America as it will be an Engineer to Order (ETO) facility, which manufactures products to customer specifications and engineering designs.

López said that by next year, its four plants in Monterrey will reach net-zero status (a balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere). The new plant is also the first in the world in which it will be possible to reutilize scrap metal.

In addition to the new Monterrey plant, Schneider is also building an 11th plant in the state of Tlaxcala.

With reports from El Financiero and El Economista

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Four of five Banxico board members including Governor Victoria Rodríguez voted in favor of leaving the benchmark interest rate unchanged. Omar Mejía, the board’s newest member, voted in favor of a 25-basis-point cut.

It was the second consecutive monetary policy meeting at which the Banxico board decided to maintain the 11% rate. The bank cut its key rate by 25 basis points from a record high 11.25% in March.

The latest decision came after the national statistics agency INEGI published data on Monday that showed that the annual headline inflation rate increased to 4.78% in the first half of June, up from 4.69% across May. That’s well above Banxico’s 3% target.

Headline inflation has been on the rise since March, but the annual core rate — which is closely watched by the central bank — has trended down in the same period.

Banxico said in a statement on Thursday that its governing board “assessed the behavior of inflation and its determinants, as well as of inflation expectations” before the majority vote in favor of leaving the key interest rate at 11%.

The central bank said that the recent depreciation of the Mexican peso “impacts the inflation forecast upwards,” but added that “its effects are partly offset by those associated with the greater weakness exhibited by economic activity.”

Banxico said that headline inflation is “still expected to converge to the target in the fourth quarter of 2025,” but noted that that forecast is subject to a range of upside risks, including “greater foreign exchange depreciation” and “the intensification of geopolitical conflicts.”

The bank said that its board concluded that “the challenges and risks in both sides of the balance” call for a continuation of prudent monetary policy.

“Looking ahead, the board foresees that the inflationary environment may allow for discussing reference rate adjustments,” Banxico added.

However, it stressed that “actions will be implemented in such a way that the reference rate remains consistent at all times with the trajectory needed to enable an orderly and sustained convergence of headline inflation to the 3% target during the forecast period.”

Gabriela Siller, director of economic analysis at Mexico’s Banco Base, said earlier this week that her team expected two additional interest rate cuts this year, “but toward the end of the year, when conditions are better.”

How did the peso react to Banxico’s rates decision?

Neither the interest rate decision nor President-elect Claudia Sheinbaum’s announcement earlier on Thursday of five additional appointments to her cabinet had a major impact on the USD:MXN exchange rate.

The peso closed at 18.33 to the dollar on Wednesday, and had depreciated to 18.46 just before the Banxico announcement, the El Economista newspaper reported. At 5 p.m. Mexico City time, the peso was trading at 18.47 to the greenback, according to Bloomberg.

The peso has depreciated almost 8% against the dollar since the June 2 elections due to concerns that the ruling Morena party and its allies will be able to get a range of controversial constitutional reform proposals through Congress.

The Morena-led coalition won a two-thirds majority in the lower house and fell just short of a supermajority in the Senate, putting it within reach of the numbers it needs to approve the proposed reforms.

The Bank of Mexico didn’t mention the election results in its statement, but did say that “the presence of idiosyncratic factors generated high volatility in Mexico’s financial markets.”

With reports from El Economista and El Financiero

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It was reported last week that the refinery was set to reach an output of 73,000 barrels per day (bpd) of ultra-low sulfur diesel (ULSD), and high-ranking Pemex official Leopoldo Figueroa said that gas stations near the refinery, located in the municipality of Paraíso, had begun receiving that diesel.

In addition, Pemex CEO Octavio Romero said last Thursday that the refinery would operate “at full capacity” next month.

But the Reuters news agency published a report on Monday that painted a much less favorable picture of the multi-billion-dollar refinery President Andrés Manuel López Obrador inaugurated in July 2022, even though it wasn’t finished.

In a report that cited “five sources familiar with the operations” at the refinery, Reuters said that “Pemex officials had sought to demonstrate the refinery was operational by bringing a cargo of high-sulfur diesel to the Olmeca refinery to be turned into ultra-low-sulfur diesel.”

However, the USLD was “not produced from crude oil as is the plan,” Reuters said.

What is more concerning is that the five sources, including engineers working at the refinery, told the news agency that Pemex is unlikely to produce any commercially viable motor fuels at the refinery before the end of the year.

The refinery — construction of which began in 2019 and whose cost has blown out to at least US $16.8 billion — is eventually slated to have the capacity to refine 340,000 bpd of crude per day.

Reuters’ sources said that getting the refinery to a “full capacity” operational level in July, as Romero said would occur, is impossible. They also said that progress at the facility was exaggerated in the lead-up to the June 2 presidential election, which ruling Morena party candidate Claudia Sheinbaum won in a landslide.

Two sources, both engineers with “detailed knowledge of the operations,” told Reuters that technicians were still working on individual parts of the refinery and would subsequently be tasked with the even more challenging task of linking them together.

One source described the interconnection challenge as an extremely complex and “agonizing” trial and error process that would take months.

The other engineer said that the first of two production lines could be completed in October and November, but only in the most optimistic of scenarios.

“Technically and operationally, the refinery is fine so far but the problem is the expectations that have been created,” the source told Reuters.

He said that information announced by government officials “doesn’t take into consideration more technical criteria” about how an oil refinery works.

On a positive note, Reuters reported that none of its five sources “said the construction of the refinery was inherently flawed.”

It also reported that the sources said “it is too early to determine how the delay would affect public finances because refining margins are not known.”

López Obrador, a staunch energy nationalist, had hoped that Mexico would reach self-sufficiency for gasoline during his six-year term in office.

In addition to building the new refinery in AMLO’s home state of Tabasco, the current federal government has invested heavily in the rehabilitation of Pemex’s six existing refineries in Mexico, and purchased Shell’s stake in one the state oil company jointly owned in Texas.

But Mexico still imports significant quantities of fuel, and the soonest self-sufficiency can be achieved, according to projections Romero presented in January, is 2027.

Last year, Reuters reported, Mexico spent just under US $31 billion on various types of imported fuel, including gasoline and diesel.

With reports from Reuters

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The national statistics agency INEGI reported that the economy grew 0.9% in April compared to the same month of 2023.

Annual growth in March was a much higher 3.3%, while the economy expanded 1.9% in the first quarter of 2024 compared to the same period of last year.

INEGI data also shows that the Mexican economy contracted 0.6% in April compared to the previous month.

The newspaper Reforma reported that the month-over-month contraction, as measured by INEGI’s Global Indicator of Economic Activity (IGAE), was the worst result for the Mexican economy in 32 months.

On an annual basis, the primary sector of the economy contracted 1% in April, while the secondary and tertiary sectors grew by 0.6% and 1.3%, respectively.

On a month-over-month basis, Mexico’s primary, secondary and tertiary sectors all went backward. The primary sector contracted 2.5%; the secondary sector declined 0.5%; and the tertiary sector — which contributes to more than 60% of Mexico’s GDP — shrank by 0.6%.

Mexico’s manufacturing industry — part of the secondary sector of the economy, an export powerhouse and a major recipient of foreign investment — declined 1.5% in April compared to the previous month.

Gabriela Siller, director of economic analysis at Mexico’s Banco Base, described the IGAE data for June as “very bad.”

The Mexican economy grew 3.2% in 2023, but the pace of growth is forecast to slow this year, in part due to a slowdown in the United States economy.

The International Monetary Fund is currently predicting a 2.4% expansion this year, while the consensus forecast of more than 30 banks, brokerages and research organizations recently surveyed by Citibanamex is that the Mexican economy will expand 2.1% in 2024.

In another post to the X social media platform, Siller said that economic growth in Mexico “can increase” if the country takes advantage of the nearshoring opportunity.

For that to occur, Mexico needs to be promoted as a nearshoring destination; water, electricity and highway infrastructure needs to be built; and the country needs “certainty in internal economic policy,” the analyst wrote.

With reports from El Economista and Reforma 

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Jorge Vallejo, the general director of BYD México, told the news agency last week that the company is in final negotiations over the location of its planned EV plant in Mexico.

He said that an official announcement on the facility is expected in the coming months.

Bloomberg reported that Vallejo didn’t say how many of the approximately 10,000 workers would be directly employed by the BYD plant in Mexico and how many would work for the automaker’s contractors and suppliers.

It noted that a plant with 10,000 workers would employ more people than the facilities of some automakers with an established presence in Mexico.

The country’s largest automotive plant — Volkswagen’s facility in Puebla — employs 6,100 assembly line workers, 5,000 supervisory employees and thousands of other people who handle parts assembly, according to Bloomberg.

Vallejo said that 23 of Mexico’s 32 states have attempted to lure BYD with proposals to host the company’s plant. He said the company has narrowed its options to three states.

Federal officials told Reuters in April that pressure from United States authorities had led the Mexican government to refuse to offer incentives such as low-cost public land and tax cuts to Chinese electric vehicle manufacturers planning to invest in Mexico.

In February, when BYD confirmed it would open a plant in Mexico, Vallejo said that the company was looking at parts of the country where there is already an established automotive sector. He said the automaker was seeking the location with the “best conditions,” taking things such as local infrastructure and the availability of labor into account.

BYD Americas CEO Stella Li told Reuters in February that the Shenzhen-based company would make 150,000 vehicles per year for the Mexican market at its proposed plant.

“Our plan is to build the facility for the Mexican market, not for the export market,” she said.

Sales of Chinese vehicles increased significantly in Mexico last year, but two of five Chinese automakers for which national statistics agency INEGI provides data saw their sales decline on an annual basis in the first five months of the year.

Vallejo told Bloomberg that BYD is on track to sell 50,000 vehicles in Mexico this year. In the last quarter of 2023, BYD overtook Tesla as the world’s largest EV manufacturer by sales, but most of its customers are in China.

As the company seeks to increase its sales in other countries, it launched its first-ever pickup truck model — the BYD Shark — in Mexico last month.

With reports from Bloomberg

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Bloomberg data shows that the peso reached 17.88 to the greenback at 11:45 a.m. Mexico City time just hours after the national statistics agency INEGI reported that annual headline inflation in Mexico was 4.78% in the first 15 days of June, up from 4.59% in the previous two-week period and 4.69% across May.

The currency, which closed at 18.11 to the greenback on Friday, also benefited from a slight general weakening of the dollar.

The inflation rate in the first half of the month is 0.05 percentage points higher than the 4.73% median forecast of analysts surveyed by Bloomberg.

The higher-than-expected reading increases the probability that the Bank of Mexico board — which is targeting 3% inflation — will vote to maintain the central bank’s official interest rate at 11% at its monetary policy meeting this Thursday.

Such a decision would benefit the peso as it would not narrow the differential between the Bank of Mexico’s benchmark interest rate and that of the United States Federal Reserve, currently set at a 5.25%-5.5% range.

The peso has benefited for an extended period from the wide gap between official interest rates in the two countries, but it took a hit after the results of the June 2 elections in Mexico put the ruling Morena party in a strong position to approve a package of constitutional reform proposals President Andrés Manuel López Obrador sent to Congress earlier this year.

The currency strengthened late last week after President-elect Claudia Sheinbaum announced her first cabinet picks, including Marcelo Ebrard as economy minister. Even with the additional appreciation on Monday morning, however, the peso remains over 5% weaker than it was before the elections.

High prices for fresh produce and services fuel inflation

INEGI data shows that inflation for fruit and vegetables, and services, remains stubbornly high.

Fruit and vegetables were 17.28% more expensive in the first 15 days of the month than in the first half of June 2023.

Annual inflation for agricultural products more broadly was 8.99%. That figure was tempered by the comparatively low 2.46% inflation rate for meat.

The price of some fresh produce increased significantly compared to the previous two-week period, as drought continues to have an impact on food prices.

Chayotes, for example, were 79% more expensive than in the second half of May, while prices for oranges increased 19% and lettuce and cabbage were 15% dearer. Banana prices spiked 11%, while avocados were almost 8% more expensive.

Meanwhile, annual inflation for services was 5.19% in the first half of June, while processed food, beverages and tobacco were 4.28% more expensive.

Electricity prices including gasoline increased 4.74%, while non-food goods were 2.18% more expensive.

The closely-watched annual core inflation rate, which excludes volatile food and energy prices, was 4.17% in the first half of June, up from 4.11% in the second half of May, but down from 4.21% across last month.

The rate was slightly lower than the 4.18% median forecast of analysts surveyed by Bloomberg.

Jessica Roldán, chief economist at the Finamex brokerage, said that the headline inflation rate was “worse than expected because the reported increase in the fruits and vegetables component was much greater than anticipated.”

The impact of those prices on inflation could “last for longer not only because of the prolonged period of dry weather that we’ve seen, but because in the future other factors — such as stronger rains in parts of the country — could also affect crops,” she said.

Recent depreciation of the peso will also influence Banxico’s rate decision

In addition to inflation — which has been on the rise since March — the Bank of Mexico (Banxico) “must now also consider the upside risks to inflation from the peso’s depreciation,” Bloomberg reported.

Kimberley Sperrfechter, an emerging markets economist at London-based Capital Economics, wrote in a note that “the continued strength in core services inflation in Mexico in the first half of June, combined with the post-election slump in the peso and heightened political uncertainty, means that Banxico is unlikely to restart its easing cycle at Thursday’s Board meeting.”

Gabriela Siller, director of economic analysis at Mexico’s Banco Base, believes that a majority of the central bank’s board will vote to maintain the 11% interest rate due to factors including the recent depreciation of the peso.

“The quick depreciation of the peso could generate inflationary pressures, but they’re not always of the same magnitude, so it would be prudent to wait and see,” she said.

“Going forward, we think … [the Banxico board is] going to cut twice more in the year, but toward the end of the year, when conditions are better,” Siller said.

The bank made an initial cut to what was a record-high 11.25% interest rate in March.

Another consideration for the central bank’s board this Thursday will be data that shows that the Mexican economy grew just 0.9% in annual terms in April, down from 3.3% in March.

With reports from El Economista, Bloomberg and El Financiero

The post Peso stronger, prices higher as June comes to a close appeared first on Mexico News Daily

Governor Ramírez also said that officials from both governments had agreed on a new security model for the avocado export sector.

Why did the USDA suspend avocado and mango inspections?

Two USDA Animal and Plant Health Inspection Service (APHIS) inspectors were reportedly detained and/or attacked during a road blockade in Aranza, a town in the municipality of Paracho, Michoacán on June 14. In response, the USDA paused avocado and mango inspections and the State Department reissued its Level 4 “Do Not Travel” advisory for the state.

When will inspections resume?

On Friday, Salazar issued a statement saying APHIS employees would gradually return to packing plants in Michoacán. 

“It’s still necessary to make progress to guarantee the safety (of the health safety inspectors) before we can achieve full functioning,” Salazar said in his Friday statement.

Salazar traveled to the state capital of Morelia on Monday to meet with Governor Ramírez Bedolla and private sector representatives to discuss the security issues, concluding with a press conference announcing the lifting of the suspension.

Mexico’s Agriculture Minister Victor Villalobos thanked Salazar in a post on X, saying that “this reflects what can be achieved working together for a common goal: the well-being of producers, workers and inspectors, their families and communities; as well as the environment and its natural resources.”

AMLO weighs in on the suspension

President Andrés Manuel López Obrador criticized the suspension during his Monday morning press conference.

“We’d prefer that the U.S. government avoid unilateral actions. We’re on good terms … that’s not the way to handle things,” López Obrador said. “Why such high-handedness? We could have talked this through instead of halting exports.” 

The president dismissed the alleged attack as a minor incident but said he respects the way the U.S. government works. Despite complaining that “this sets a poor precedent,” he did express gratitude toward Ambassador Salazar for working to resolve the issue quickly.

How much have avocado and mango producers been affected?

Representatives of the avocado export industry said the suspension — which didn’t affect fruit exports already in transit, but did halt other exports — cost growers approximately US $52 million, according to the newspaper La Jornada.

Exporters claim that the damage was particularly severe since demand for avocados increases ahead of the July 4 U.S. Independence Day celebrations, even more so than for the annual NFL Super Bowl game in February.

Avocados are a top Mexican agricultural export to its northern neighbor worth billions of dollars each year. The state of Michoacán is Mexico’s No. 1 avocado producer and exporter. 

Mango producers say they lost roughly US $30 million, claiming that about 5,000 tonnes of mango were affected.

Producers in Michoacán say the security concerns are not limited to U.S. inspectors. Farmers in the state have long dealt with extortion rackets perpetrated by powerful organized crime groups seeking to profit from the lucrative trade.

With reports from La Jornada, El Universal and Reuters

The post US resumes avocado and mango inspections in Michoacán appeared first on Mexico News Daily

A suspension of inspections — and thus a halt to exports — was imposed on June 14, following an incident in which two USDA employees were attacked and detained in a rural part of Michoacán, according to a statement from U.S. Ambassador Ken Salazar. The Mexican avocado export association APEAM confirmed that the USDA had also halted exports of avocados that already passed inspection.

Salazar made clear that no other Mexican exports were blocked and the pause would not affect avocados and mangoes already in transit.

President Andrés Manuel López Obrador addressed the issue at his Wednesday morning press conference, saying that Mexico would not file a complaint under the United States-Mexico-Canada Agreement (USMCA), and that Mexico’s Foreign Relations Minister Alicia Bárcena is holding consultations with Salazar.

Michoacán Governor Alfredo Ramírez Bedolla told reporters on Monday that Mexican authorities were working with U.S. officials to resolve the situation. Ramírez is scheduled to meet with Salazar on Monday.

Meanwhile, farmers from the state are lobbying U.S. officials to allow avocados that had already been inspected to be exported, according to the newspaper La Voz de Michoacán.

The association representing the farmers met with Salazar on Thursday, but the ambassador and his team told them no action would be taken until new security protocols were established. U.S. officials told the farmers that the safeguards established in a 2022 agreement have not been met.

The state of Michoacán produces the majority of Mexico’s avocados and is one of Mexico’s primary avocado exporters. However, the state has suffered from cartel violence and widespread extortion, as organized crime groups fight for control of the state’s agricultural production and drug-trafficking routes.

The cartels are known to force farmers to pay protection money and avocado- and lime-producers have been especially hard hit. Mexico is the world’s leading producer of avocados and exports in 2023 to the United States were worth US $2.7 billion, according to California Fruit & Vegetable Magazine.

An April USDA report forecast Mexico’s 2024 avocado production at 2.77 million metric tons (MMT), a 5% increase over 2023 on strong export demand.

Two years ago, the U.S. briefly banned avocado imports from Mexico following threats to a USDA inspector in Michoacán.

With reports from Milenio, CNN and La Voz de Michoacán

The post A week into USDA pause, avocado and mango inspections remain suspended in Michoacán appeared first on Mexico News Daily

The El País newspaper reported that the peso gained 0.3% against the greenback moments after Sheinbaum announced that former foreign affairs minister Marcelo Ebrard will be her economy minister once she is sworn in as president on Oct. 1.

The peso was trading at 18.31 to the dollar at around midday Mexico City time, not long after the president-elect named Ebrard and other members of her cabinet:

• Alicia Bárcena (environment)
• Juan Ramón de la Fuente (foreign affairs)
• Rosaura Ruiz (science)
• Julio Berdegué (agriculture)
• Ernestina Godoy (legal advisor)

CI Banco said in a note that “the market’s interpretation seems to be that Sheinbaum’s cabinet are officials who have extensive technical and political capabilities.”

The USD:MXN rate was 18.36 at 4:30 p.m., according to Bloomberg. The closing rate on Wednesday was 18.42.

Based on the 18.36 rate, the peso has depreciated more than 7% against the U.S. dollar since Sheinbaum and the ruling Morena party’s comprehensive victory in the federal elections on June 2.

Morena and its allies won a two-thirds majority in the Chamber of Deputies and a strong majority in the Senate. That places the Morena-led coalition in a strong position to approve a raft of constitutional reform proposals submitted to Congress by President Andrés Manuel López Obrador earlier this year.

The likelihood of the proposed reforms being approved — particularly ones that seek to overhaul the judiciary, make changes to Mexico’s electoral system and eliminate various autonomous government agencies — has caused major concern in markets and led the peso to depreciate.

Shortly after the elections, Sheinbaum sought to calm markets by announcing that current Finance Minister Rogelio Ramírez de la O would remain in his position when she takes office, and endorsing a set of economic commitments he outlined.

She also promised that “broad consultation” would take place before reform proposals are considered by Congress and declared that investors have “nothing to worry about.”

However, the president-elect was unable to stop the peso sliding to almost 19 to the dollar last week.

The peso had recovered somewhat from that position when it got an apparent boost by the announcement that Ebrard will be Mexico’s next economy minister.

Reuters reported that the former foreign minister — who was an initial competitor with Sheinbaum for the Morena presidential candidate nomination — is “widely considered a business-friendly [cabinet] pick,” adding that he “successfully managed relations with the United States” during his almost five-year tenure as the nation’s top diplomat.

El País reported that Ebrard is “perceived by markets as a politician with better ties to the private sector” than current Economy Minister Raquel Buenrostro.

As economy minister, he will be in charge of Mexico’s future trade negotiations.

In a short speech after his appointment, Ebrard said that the world today has become “more protectionist” and “to some extent more unstable” than it was previously.

“The assignment [we have] is to navigate those stormy waters with everything we’ve learned in our lives,” he said.

Ebrard later told reporters that the 2026 scheduled review of the United States-Mexico-Canada Agreement, or USMCA, will be a top priority for him, along with the pending ratification of a new trade pact between Mexico and the European Union.

He also noted that the Economy Ministry has been tasked with attracting more foreign investment to Mexico, including investment related to the growing nearshoring trend.

Another responsibility for Sheinbaum’s economy minister pick will be the development of a chain of industrial parks in the Interoceanic Corridor of the Isthmus of Tehuantepec, located between Salina Cruz, Oaxaca, on Mexico’s Pacific coast and Coatzacoalcos, Veracruz, on the Gulf coast.

With reports from El País and Reuters 

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