1Q26_ Quarterly Outlook Report_Final_EN - Flipbook - Page 95
T H E P LUMB LI N E | A RETU RN TO F I RS T PRI N CI PL ES
U.S. imports from Mexico face a 25-30% duty rate, but only 15-20% of all imports are subject
to tariffs
30%
28%
25%
20%
17%
15%
10%
5%
5%
0%
2020
2021
2022
Duty rate on all imports
2023
2024
Dutiable % of imports
2025
Duty rate on dutiable imports
Source: Scotiabank Economics, US ITC., Scotia Wealth Management.
Which brings us to fiscal policy. The Claudia Sheinbaum Pardo administration’s soft drink tax
and tariff hikes may provide only slight support to the fiscal balance, while the Finance Ministry
relies on optimistic growth and revenue assumptions that are unlikely to materialize, risking an
overshoot of its deficit projection. As discussed previously, the tax and tariff policies could have
the unintended effect of keeping borrowing rates – and thus debt servicing costs – elevated,
leaving fiscal goals even more out of reach.
A worsening fiscal path, or one drifting from target, could also prompt lawmakers to introduce
wealth or inheritance taxes or even seek a higher share of large corporations’ revenues, all of
which would carry negative implications for spending and investment. In our baseline, we do
not think rating agencies will lower Mexico’s credit rating or outlook, but we do think it will be
important to monitor their reactions to the evolving state of the country’s public finances over
the coming year.
Nearshoring gains appear fragile as firms report higher sales, output or investment over the
past twelve months
15.8%
12.4%
11.9%
11.0%
9.8% 10.0%
9.0%
8.3%
8.0%
6.2%
6.4%
6.0%
6.4%
5.6%
3.5%
North
Centre-Nth
Jul 2022-Jun 2023
Centre
Jul 2023-Jun 2024
South
National
Jul 2024-Jun 2025
Source: Banxico, Scotiabank Economics, Scotia Wealth Management.
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