December 12th, 2025
Hot Topics
”FOURTH TRANSFORMATION”
ANNIVERSARYMEETINGINZOCALO
President Claudia Sheinbaum marked the seventh anniversary of Mexico’s “Fourth Transformation” with a mass rally in Mexico City’s Zócalo. Before a crowd she claimed totaled 600,000, Sheinbaum highlighted major economic indicators: a 154% increase in the minimum wage since 2018, real average-wage growth of 77%, controlled inflation at 3 57%, record FDI exceeding USD 40 billion in 2025, and strong employment creation with unemployment at 2 6% On Mexico–U S relations, Sheinbaum stressed that cooperation with the Trump administration is built on sovereignty, shared responsibility, and “collaboration without subordination.” The message aimed to signal firmness ahead of sensitive bilateral negotiations in 2026.
Source: LA JORNADA
U.S.-MEXICO TENSION OVER WATER DISPUTE
Although last Friday President Claudia Sheinbaum held her first in-person meeting with U.S. President Donald Trump during the 2026 World Cup draw; which the presidents described as a cordial and largely protocolary encounter, the week ended with renewed bilateral tension over water deliveries under the 1944 Water Treaty
Fridays' meeting had limited progress on trade, as Sheinbaum noted that discussions focused on maintaining cooperation ahead of the USMCA review But, despite this positive tone, this week Trump announced he had authorized documentation to impose a 5% tariff on Mexican products if Mexico “continues failing to comply,” alleging a deficit of nearly one billion cubic meters and setting a December 31st deadline to deliver 246 million cubic meters. U.S. officials and politicians, particularly in Texas, argue that shortages are harming farmers and insist Mexico provide “the maximum possible” volume
As a response, Mexico maintains it is complying to the extent allowed by severe drought conditions and has proposed a technical plan to U S counterparts The issue adds a new stress point to the bilateral agenda just as both governments prepare for the 2026 USMCA negotiations.
Source: BBC
CONGRESS CLOSES PERIOD WITH TARIFF AND CIRCULAR ECONOMY REFORMS
Mexico’s Congress closed its legislative session on Thursday, December 10th, approving two major initiatives before adjourning until February 1st, 2026 The Senate passed reforms to the Tariff Law, raising import duties on products from China and other countries without free trade agreements. The measure aligns with U.S. pressure to curb Chinese transshipments through Mexico and is presented by the government as part of Sheinbaum’s Plan México to strengthen domestic industry and reduce external dependence. However, concerns persist regarding inflation risks, accelerated legislative processing, and China’s potential retaliation. On the same day, the Senate approved the new General Circular Economy Law. The legislation sets national criteria to increase recycling, reduce waste, and promote circular design across supply chains.
Sources: EL ECONOMISTA
Hot Topics
SHEINBAUM TURNS TO BUSINESS ELITE TO JUMP-START GROWTH
President Claudia Sheinbaum convened 18 of Mexico’s most powerful business leaders to form a new Investment Promotion Council, aiming to boost private capital amid stalled public spending and sluggish economic growth The group is led by Carlos Slim and includes key figures from banking, telecom, mining, beverages, industry and media The move seeks to support her broader “Plan México,” betting that alignment with Mexico’s corporate elite will accelerate nearshoring opportunities and unlock private capital, though it also highlights growing dependence on a small cluster of economic power brokers.
Source: PROCESO
U.S. MANUFACTURERS RALLY BEHIND USMCAAHEAD OF 2026 REVIEW
U.S. automakers and manufacturers strongly defended the USMCA during USTR’s public hearings, positioning the agreement as essential to U.S. competitiveness ahead of its 2026 review. The American Automotive Policy Council (AAPC) and the National Association of Manufacturers (NAM) argued that the agreement has driven more than USD 210 billion in new U S automotive investment and remains the most “proAmerican” trade pact in force
Separately, over 500 U S business and agricultural groups urged USTR to preserve the agreement’s core structure and avoid changes that could disrupt regional integration. While most stakeholders support a 16-year extension, analysts warn of uncertainty as the Trump administration signals openness to renegotiating bilaterally or even withdrawing. The private sector is preparing for a contentious review with major implications for North American supply chains.
Source: EL FINANCIERO
MEXICO MOVES TO SHAPE USMCA REVIEW THROUGH LABOR AND INVESTMENT ALIGNMENT
Mexico is intensifying its positioning ahead of the 2026 USMCA review with two parallel fronts: a new labor-dialogue proposal and coordination with global companies on investment and supply-chain policy Mexico formally proposed creating a North American Tripartite Labor Dialogue Forum starting in 2026 The mechanism aims to institutionalize continuous engagement and reduce long gaps between formal meetings. The initiative responds to scrutiny from U.S. and Canada that Mexico “is not meeting labor obligations.”
In parallel, Economy Secretary Marcelo Ebrard met with the Council of Global Companies (CEG) to coordinate private-sector positions for the 2026 review. Both sides agreed on three priorities: aligning negotiation stances, accelerating nearshoring investments, and deepening local supplier development Combined, these steps signal Mexico’s intention to shape the upcoming review through proactive labor diplomacy and tighter coordination with major investors, aiming to reinforce the country’s reliability within North America’s integrated production system.
Source: EL ECONOMISTA
Legislativeand RegulatoryIssues:
LABOR
Decree Initiative to Amend Article 63 of the Federal Labor Law on Rest Periods Inside or Outside the Workplace
• Presented by: Sen Andrea Chávez Treviño (MORENA)
• Objective: Mandates that workers in continuous workdays receive at least a thirty-minute break, granting them the choice to take this rest period inside or outside the workplace The measure aims to strengthen worker autonomy, improve rest conditions, and ensure greater flexibility
• Status: Published in the Parliamentary Gazette on December 10, 2025.
PUBLIC ADMINISTRATION
Bill Amending Various Provisions of the Federal Criminal Code
• Presented by: Senate
• Objective: The bill increases penalties for environmental and environmentalmanagement crimes. It establishes higher prison terms and fines for obstructing authorities, breaking seals, mishandling hazardous substances, polluting federal waters and soils, illegally exploiting vegetation and submitting false environmental information
• Status: Published in the Parliamentary Gazette on December 10, 2025.
ENVIRONMENTAL
General Law on Circular Economy and Amendments to Environmental Legislation
• Presented by: Chamber of Deputies
• Objective: The bill establishes a national circular economy framework to extend product life cycles, reduce waste generation, and enhance reuse, recovery, and valorization processes It defines principles, allocates government responsibilities, creates a national system and planning program, and mandates mechanisms, reporting duties, and oversight tools to strengthen environmental protection
• Status: Approved on December 10, 2025; sent to the Federal Executive
Please note that this is your last weekly report of 2026. Next week, you will receive a compilation of the year’s most important developments.
TRADE
Bill that Enacts the General Law on Circular Economy and Amends Environmental Legislation
• Presented by: Chamber of Deputies
• Objective: The bill establishes a national circular economy framework to extend product life cycles and reduce waste through reuse, recovery, and valorization. It defines principles, allocates responsibilities across government levels, creates a National System and planning program, and sets reporting, oversight, and producerresponsibility mechanisms to strengthen environmental protection
• Status: Approved on December 10, 2025; sent to the Federal Executive.
Bill Amending Article 76 Bis and Adding a Paragraph to Article 85 of the Federal Consumer Protection Law
• Presented by: Sen. Lorenia Iveth Valles (MORENA)
• Objective: The bill strengthens consumer rights in electronic, optical, or technology-based transactions by guaranteeing free contracting under the principle of autonomy of will.
Status: Published in the Parliamentary Gazette on December 10, 2025
