Mexico City, (EFE) .- The Mexico and Canada Treaty (TMEC) will continue as a regional integration pillar beyond 2026, but will face a long and controversial review, which could lead to more restrictive conditions for the country, estimates the Swiss Bank UBS in its most recent investment analysis in Mexico.
“Despite the volatility potential, the high degree of American integration and mutual benefit make a total break in our opinion. We continue to believe that the TMEC will last, although possibly with more strict conditions for Mexico and Canada,” reads the report of the main investment office released on Monday.
The strategists of UBS Alejo Czerwonko, Gabriela Soni and Laura Assis recalled that the process formally begins on October 1, 2025, when a 90 -day consultation period is opened.
Meanwhile, by January 2026, the US Commercial Representative Office (UST) must submit to Congress a report with the objectives of the review, according to its laws.
Although the treaty does not provide for a complete renegotiation, the report maintains that recent statements from US officials – including the Secretary of Commerce, Howard Lutnick – suggest that Washington could approach conversations with broader ambitions.
The analysis also states that the announcement of a 30 % tariff on Mexican goods “was surprising”, above all, considering the “constructive” approach of Mexico in negotiations.
It also details that the Mexican government estimates that 87 % of trade with the US benefits from TMEC protections, while US authorities place the figure about 75 %.
However, it emphasizes that the effective average tariff on Mexican exports to the US is now between 7%and 8%, below 15%, the minimum for most countries to which this new rate has been imposed.
“In summary, Mexico continues to enjoy a relatively favorable commercial position, to a large extent due to the TMEC,” the specialists point out.
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Investment sensitive to commercial uncertainty
In this context, UBS analysts warned that the feeling of investment in Mexico has weakened, since direct foreign investment has constantly decreased since the beginning of 2024.
“For Mexico, the priority will be a strategic and reflective approach: preserve what works, modernize where necessary and use the review to boost investment and long -term certainty,” adds the report.
Likewise, UBS strategists considered that Mexico’s position as the main business partner of the US continues to support the strength of the weight, despite possible volatility, and anticipated that the exchange rate is located in 18.8 pesos per dollar at the end of 2025.
Likewise, the report points out that Mexican sovereign bonds called in US dollars continue to quote more broad than other bbb rating bonds, reflecting the persistent concern for internal reforms and commercial uncertainty.
Last Friday, the Global Oxford Economics firm indicated in a report that the eventual increase in tariffs, an increase from 25% to 30% of the United States to Mexico “will not have a great impact on trade”, as long as exemptions for TMEC products and US car content are maintained.
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