Mexican President-elect Claudia Sheinbaum has said that her administration has no plans to increase taxes in the nation. Instead, she will focus on increasing the country’s minimum wage while ensuring significant investments in infrastructure projects. According to the incoming president, the country can channel resources into most needed areas without “deep fiscal reforms.”
Sheinbaum was recently elected as Mexico’s first female president. The former mayor of Mexico City got up to 60% of the votes cast in the recent elections, defeating rival Xóchitl Gálvez. On October 1, Sheinbaum will replace outgoing President and mentor Andrés Manuel López Obrador (AMLO), who assumed office on December 1, 2018.
Impact of Sheinbaum Administration on Mexico
There are several thoughts about how Sheinbaum’s presidency might impact Mexico. For instance, a reasonable increase in Mexico’s minimum wage may have several positive effects, including a rise in the average person’s disposable income. This could encourage industries like commerce and finance, stretch improvements to leisure, and even boost the size of bankrolls at online and Bitcoin casinos like those listed here.
One comparison made between the incoming and outgoing presidents is that AMLO has a more confrontational approach, in general, than Sheinbaum. The incoming president’s scientific background is credited for her usual methodical way of approaching problems and paying attention to several options. People hope this problem-solving approach will help her solve some issues with the relationship between Mexico and the United States. These include migration, trade, and crimes committed across both countries’ borders. Also, Sheinbaum collaborated with US agencies on security issues while serving as Mexico City’s mayor, a point in favor of her administration fighting crime in partnership with US law enforcement.
Interestingly, there are also fears that AMLO would significantly influence Sheinbaum’s presidency. The outgoing president has said he intends to leave politics when he hands over, adding his intention to write a book while in retirement at a southern Mexico ranch. Unfortunately, many do not believe AMLO will remain out of politics and are worried he will hold sway over Sheinbaum.
Sheinbaum has responded, dismissing comments questioning her autonomy. However, while she ensured that AMLO would not dictate to her, she admitted that “the homeland comes first” if “something terrible happens.”
Mexico and US Trade Relationship
For now, Sheinbaum must work to maintain the level of trade between the US and Mexico. According to official figures, the US traded $798 billion worth of goods with Mexico in 2023, surpassing trade figures with Canada and China. The Dallas Federal Reserve Bank noted that Mexico first scaled Canada at the start of last year when the bilateral trade between the US and China hit $263 billion in the first four months. The US ended the year with $475 billion worth of goods bought from Mexico, higher than $427 billion from China and $421 billion from Canada.
In 2023, Mexico saw a 5% reduction in Foreign Direct Investment (FDI) at the national level, compared to the year before. However, the first nine months of 2022 saw a 310% growth in FDI from nearshoring. Interestingly, a 2022 Inter-American Development Bank (IDB) report concluded that all Caribbean and Latin American countries would enjoy significant benefits of nearshoring, up to $78 billion in exports. Although the report highlighted benefits for Colombia, Brazil, and Argentina, Mexico accounted for about half of the IDB’s projection.
Overall, the general sentiment is welcoming for Sheinbaum, who has received congratulatory messages from officials in several countries, including US President Joe Biden. In a press release, Biden expressed a desire to work closely with Sheinbaum to strengthen the bond between both countries. The president-elect has already hit the ground running, announcing a few members of her incoming Cabinet.
While Sheinbaum’s administration may be promising overall, the crypto sector may not benefit directly if she continues AMLO’s policies. The Morena party, to which AMLO and Sheinbaum belong, has not directly supported digital assets, instead imposing a 20% tax on all crypto gains. If Sheinbaum continues, related efforts, including crypto cross-border transactions or crypto gambling, may be significantly affected until further notice.
