Weekly Report - 31.07.26

Weekly Report July 31st, 2026

Hot Topics TRUMP DOWNSIZES USMCA AS MEXICO DEFENDS TRADE PARTNERSHIP USMCA negotiations faced renewed political pressure after President Trump stated he would prefer not to renew the agreement, arguing that it is more important for Mexico and Canada than for the United States. The comments came shortly after the third bilateral negotiating round and underscore Washington's objective of securing stricter automotive rules of origin, increasing U.S. content in North American manufacturing, and reducing reliance on components from China and other non-regional suppliers. Trump also reiterated his strategy of encouraging manufacturers to relocate production to the United States through tariffs and industrial incentives.

Mexico responded by emphasizing the strategic importance of the bilateral economic relationship.

Secretary of Economy, Marcelo Ebrard, noted that Mexico is the largest purchaser of U.S. exports, arguing that the commercial relationship delivers significant benefits to both economies. He also stressed that Mexico continues to receive preferential treatment under USMCA, including the recent U.S. decision to maintain existing tariff conditions. Although Washington replaced its Section 122 tariff framework with new Section 301 tariffs related to forced labor, Mexico's tariff treatment remained unchanged. Both governments are expected to resume negotiations during the fourth round in Washington in September, with Mexico seeking greater certainty for investors and protection against future unilateral tariff measures.

Source: EL PAIS, EL FINANCIERO

WORLD BANK REAFFIRMS SUPPORT FOR PLAN MÉXICO World Bank President, Ajay Banga, reaffirmed the institution's commitment to supporting Mexico's economic development through closer alignment with the federal government's Plan México during his first official visit to the country.

The World Bank is preparing a new Country Partnership Framework aimed at translating policy priorities into investment and measurable outcomes, with a focus on job creation, inclusive growth, energy, infrastructure, human capital, competitive industries, and stronger supply chains. Banga also held meetings with government officials, business leaders, and President Sheinbaum to discuss cooperation.

The new partnership framework could facilitate additional financing opportunities for infrastructure, manufacturing, and sustainable development projects.

Source: EL ECONOMISTA, EL UNIVERSAL

MEXICO POSTS RECORD TRADE SURPLUS AMID STRONG EXPORT GROWTH Mexico recorded a historic trade surplus of US$9.9 billion during the first half of 2026, supported by record export performance. Total exports reached an all-time high of US$389.7 billion in the first six months of the year, while June alone marked the strongest monthly export value on record. Manufacturing remained the main driver, particularly non-automotive industries, with the United States continuing to absorb more than 84% of Mexico's non-oil exports. Analysts noted that exports continued to outpace imports, strengthening Mexico's external accounts and increasing the likelihood of a current account surplus.

The results highlight the resilience of Mexico's export-oriented manufacturing sector and the continued integration of North American supply chains. Much of the non-oil trade surplus reflects Mexico's role as a manufacturing and assembly platform, importing intermediate inputs—particularly from Asia—for processing and re-export to the U.S. While the strong trade balance supports macroeconomic stability, analysts caution that long-term performance remains closely tied to the outcome of ongoing USMCA negotiations.

Source: EL ECONOMISTA, EL IMPARCIAL

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Hot Topics AUDIENCE RIGHTS RULES SPARK DEBATE OVER MEDIA REGULATION

MEXICO'S ECONOMY POSTS STRONGEST QUARTERLY GROWTH SINCE 2020 Mexico's economy expanded by 1.5% quarter-overquarter in the second quarter of 2026, marking its strongest quarterly performance since late 2020, according to INEGI's preliminary GDP estimate.

Growth was broad-based across the economy, with services rising 1.5%, industrial activity increasing 1.6%, and agriculture expanding 3.3%. The rebound follows a modest contraction in the first quarter and was supported by stronger domestic consumption, resilient manufacturing activity, and increased economic activity associated with the 2026 FIFA World Cup, which generated an estimated MXN 65 billion in economic impact across Mexico.

The stronger-than-expected performance reinforces signs of improving economic momentum despite ongoing external uncertainty. While the federal government continues to project 2.3% GDP growth for 2026, private-sector forecasts remain more cautious, averaging around 1.1%, and the International Monetary Fund recently lowered its projection to 1.2%, citing global trade fragmentation and geopolitical risks. Nevertheless, the latest GDP data, together with easing inflation and record export performance, suggest Mexico has entered the second half of the year with stronger underlying fundamentals, even as the outcome of USMCA review negotiations and U.S. trade policy remain key factors shaping the country's medium-term outlook.

Source: EL UNIVERSAL

Mexico's telecommunications regulator has opened a public consultation on proposed regulations to implement the Audience Rights Law, requiring broadcasters to distinguish news from opinion, separate advertising from editorial content, provide mechanisms for the right of reply, improve accessibility for people with disabilities, and adopt measures to prevent the dissemination of false or misleading information. Critics warn that the proposed regulations could allow political or ideological interpretations because the new telecommunications regulator lacks institutional independence. Experts have also raised concerns that requirements related to verifying news content and the audience complaint process could be used to pressure media organizations or influence editorial decisions.

President Claudia Sheinbaum rejected claims that the proposal represents censorship, arguing that the regulations are intended solely to protect audience rights, noting that they remain under public consultation and emphasizing that Mexico has broad freedom of expression and that stakeholders may still submit comments before the rules are finalized.

Source: EXPANSIÓN, EL FINANCIERO

SENATE PREPARES GOVERNANCE REFORM AND 15% BUDGET CUT As part of the Legislative Agenda for the upcoming ordinary period, Senate Political Coordination Board (Jucopo) President Ignacio Mier announced plans to amend the Organic Law of Congress by creating a new Administration Committee responsible for strengthening transparency and oversight of administrative spending.

The proposal would redistribute powers between the Senate's Governing Board and Jucopo, aligning the chamber's governance model with that of the Chamber of Deputies. The changes aim to improve accountability and modernize Senate operations after more than two decades without major structural reforms.

Source: EXCELSIOR

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Legislative and Regulatory Issues: FISCAL

ENVIRONMENTAL

Initiative Amending Various Provisions of the Federal Labor Law and the Federal Law on State Workers Regarding Menstrual Leave • Presented by: Chamber of Deputies – Deputy Rafaela Vianey García (MORENA) • Objective: Requires employers to grant menstruating employees at least five paid working days of menstrual leave per menstrual cycle when symptoms prevent them from performing their job duties.

Status: Published in the Parliamentary Gazette – July 29, 2026.

Initiative Amending Article 29 of the Federal Environmental Liability Law • Presented by: Senate – Senator Cindy Winkler Trujillo (PVEM) • Objective: Extends the statute of limitations for environmental liability claims from twelve to twenty-five years following environmental damage. The initiative strengthens the principle of full environmental remediation, prevents responsible parties from benefiting from prescription periods, and reinforces Mexico’s environmental protection framework under prevention, precaution, and sustainable development principles.

• Status: Published in the Parliamentary Gazette – July 29, 2026.

Initiative Amending Various Provisions of the Federal Labor Law, the Income Tax Law, and the Federal Law on State Workers Regarding the Labor Inclusion of Young People • Presented by: Chamber of Deputies – Parliamentary Group of Movimiento Ciudadano • Objective: Requires employers with forty or more workers to hire at least five percent young people without prior IMSS employment records while guaranteeing gender equality.

It also grants income tax deductions for employers hiring eligible young workers.

• Status: Published in the Parliamentary Gazette – July 29, 2026.

Note: Mexico’s Congress is currently in recess; only the Permanent Commission of the Mexican Congress remains active. It is highly unlikely that another extraordinary period will take place.

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