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Trump tariffs could stall Mexico’s growth: Fitch

  • Spanish Market: Crude oil, Metals, Oil products
  • 23/01/25

US President Donald Trump's threat to impose tariffs on imports from Mexico could have a serious impact on Mexico's already sluggish economic growth in 2025, Fitch Ratings said.

"Our assumption is that Trump will follow through on some tariff threats," said Todd Martinez, senior director of sovereigns at Fitch Ratings, during a webinar. But potential 25pc tariffs would likely apply only to durable goods, which account for about 10pc of Mexico's exports to the US, thanks to protections under the US-Mexico-Canada (USMCA) trade agreement that are likely to protect oil exports, he added.

Fitch forecasts Mexico's economy to grow by just 1.1pc in 2025. But this estimate does not include the potential impact of tariffs, even if limited. Should they be implemented, these tariffs could shave 0.8 percentage points off GDP growth, potentially pushing the economy into near-zero growth or a contraction, Martinez said.

The uncertainty surrounding the scope, timing, and duration of the tariffs adds to the economic risks. "These tariffs may also serve as a negotiation tool for broader bilateral issues," noted Shelly Shetty, managing director of sovereigns at Fitch Ratings.

Exports to the US represent over 25pc of Mexico's annual GDP growth. Additionally, Mexico is home to the largest undocumented population in the US, at around 4.8mn individuals, according to Fitch.

While Trump's return to the White House could disrupt Mexico's economy, domestic challenges also threaten growth. Martinez highlighted the judicial reform passed late last year, which will overhaul the judiciary by introducing popular elections for judges and supreme court justices between 2025 and 2027. This reform has already raised concerns among global investors.

Mexico's governance index has worsened between 2012 and 2023, according to the World Bank. Fitch also noted that the ruling party Morena's supermajority in congress could further alarm international investors by introducing policies perceived as unfavorable to business.

Fitch currently has Mexico's sovereign credit rating at BBB-, its lower medium investment grade, with a stable outlook.


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11/02/25

Brazil’s January inflation lowest since 1994

Brazil’s January inflation lowest since 1994

Sao Paulo, 11 February (Argus) — Brazil's monthly inflation stood at 0.16pc in January, the lowest increase for the month since 1994 when the government enacted multiple measures to contain soaring inflation, according to government statistics agency IBGE. The consumer price index (CPI) slowed annually to 4.56pc from 4.83pc in December, heavily influenced by a 14.2pc tumble in power costs in January, compared with a 3.19pc drop in December. Power costs decelerated January's inflation by 0.55 percentage points — the major individual contributor to the annual drop, according to IBGE — thanks to a R1.3bn ($224mn) federal discount in power tariffs that month, CPI's manager Fernando Goncalves said. Food and beverage costs rose by an annual 7.25pc, decelerating from 7.69pc in December. Beef costs increased annually by almost 21.2pc following a 20.8pc gain in the month prior, while soybean oil costs decelerated to 24.55pc over the last 12 months from 29.2pc in December. Motor fuels prices rose by 11.35pc in January. Ethanol was responsible for the group's largest annual increase of 21.59pc, up from 17.58pc in the month prior. Gasoline and diesel prices also registered annual rises of 10.71pc and 2.66pc from 9.71pc and 0.66pc, respectively. Still, diesel prices remained at a 0.97pc monthly increase from December, while ethanol costs contracted by 1.82pc from 1.92pc and gasoline prices increased by 0.61pc from 0.54pc. Fuel prices are likely to keep increasing in February, as states increased the VAT-like ICMS tax on fuels and state-controlled Petrobras increased wholesale diesel prices by 6.3pc , both effective as of 1 February. Transportation costs rose by 1.3pc in January over the year, following a 0.67pc gain in December. Flight tickets were the most responsible for the increase, with a 10.42pc monthly gain from a 22.2pc contraction in December. Brazil's central bank is targeting CPI of 3pc with a margin of 1.5 percentage point above or below. The bank raised its target rate to 13.25pc in January after it failed to maintain Brazil's headline inflation under the ceiling of 4.5pc for 2024. Further increases are expected in the coming months, the bank said. The central bank has recently changed the way it tracks the inflation goal. Instead of tracking inflation on a calendar year basis, it will now monitor the goal on a 12-month basis. In 1994, Brazil enacted its Plano Real, a series of measures to stabilize the economy and detain soaring inflation, which had hit an annual 916pc by the end of that year. One of the measures was to change its currency to the real from the cruzeiro real. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Petrobras considers India for crude: CEO


11/02/25
11/02/25

Petrobras considers India for crude: CEO

Sao Paulo, 11 February (Argus) — Brazilian state-controlled Petrobras is considering opportunities in deepwater and ultra-deepwater crude blocks in India, chief executive Magda Chambriard said today. The Indian government announced on Tuesday, during the India Energy Week conference held in New Delhi, that it will offer 25 deepwater and ultra-deepwater oil blocks, Chambriard said. "We will carefully evaluate these opportunities, always looking for new production frontiers, which will guarantee us security and financing for the energy transition," she added. Petrobras has been looking for alternatives to replenish its crude reserves, as those in its main source of oil — Brazil's pre-salt — are dwindling. But reserves are not in immediate danger, as the firm's proven oil and natural gas reserves rose by 4.6pc to 11.4bn bl of oil equivalent (boe) at the end of 2024. The company's 2025-29 strategic plan envisions investments in Argentina, Bolivia, Colombia and Africa, but this is the first time Petrobras mentioned India as a potential source of crude. Still, the company's main bets to replenish reserves are the southern Pelotas basin and the Foz do Amazonas basin in the northern equatorial margin. The latter could contain 10bn of recoverable bl of oil equivalent, according to energy research bureau EPE. Petrobras is awaiting permission to start exploratory drilling there , after it appealed environmental agency Ibama's May 2023 decision to deny the license on environmental grounds. By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexican auto exports slow in January


11/02/25
11/02/25

Mexican auto exports slow in January

Mexico City, 11 February (Argus) — Mexico's light vehicle exports fell by 14pc in January from a year earlier as uncertainty over US trade policy raises questions over prospects for exports going forward. Automakers in Mexico shipped 219,414 units in January, with 84pc bound for the US, according to statistics agency Inegi data. January exports declined by 17pc from December. Meanwhile, production edged up by 2pc to 312,257 units in January from a year earlier, while domestic sales rose by 6pc to 119,811 vehicles. Still, domestic sales dropped by 18pc from December. The mixed performance signals a sluggish start for the sector in 2025, following a record-breaking 2024 , when Mexico produced 3.99mn autos and exported 3.49mn. "While the industry continues to grow, it does so at a slower pace," said Guillermo Rosales, president of Mexican retailer association AMDA. Investment in Mexico's auto sector slowed in November and December, reflecting lower producer confidence and expectations of slower economic growth in 2025, Rosales added. AMDA forecasts 1.53mn auto sales in 2025, up by 2.2pc from a year earlier. But should the US impose a proposed 25pc tariff on Mexican vehicles, the forecast falls to 1.48mn sales. Inegi reported 10,881 electric (EV) and hybrid vehicles sold domestically in January, a 36pc annual increase. But sales fell by 30pc from December, marking the segment's first monthly decline since August. Automaker association AMIA said EV and hybrid production jumped by 60pc to 169,929 units last year. While AMIA did not report January figures, an Argus analysis of Inegi data shows production of four of Mexico's five EV and hybrid models reached 16,034 units in January, up by 86pc from December. Inegi did not separate production totals for the Wagoneer S EV and its internal-combustion counterpart, although AMIA reported 4,726 units produced in 2024. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

CME north EU HRC curve softens on US duty


11/02/25
11/02/25

CME north EU HRC curve softens on US duty

London, 11 February (Argus) — North European hot-rolled coil (HRC) futures prices softened today, as the market digested the imposition of 25pc US tariffs on all imports. During the London morning, March traded at €622/t in the broker market on CME Group's north European HRC contract, down from €633/t last Friday. April traded at €627/t, down from the last trade also at €633/t, before slipping to €625/t at 13:43 GMT. February traded at €602/t, a premium of €8.62/t to the month-to-date average of Argus' underlying north EU HRC index, at €593.38/t, with 13 trading days still remaining. On the CME screen, March traded down by €13/t to €620/t, while July nudged down by €2/t to €645/t. The US accounts for around 15pc of EU HRC exports and it takes another 1.3mn t across cold-rolled coil, hot-dip galvanised and tinplate, based on January-November 2024 data. It took over 683,000t of tinplate in the first 11 months of last year, from Germany and the Netherlands. The new US tariff, applied without exemption, could redirect tonnes to the EU, although the safeguard review will address this to some extent from 1 April. The tariff strengthens the case for an EU melt-and-pour clause against Chinese steel, and a meaningful revision to quota volumes, sources said. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Feyzin bitumen output halted as part of wider stoppage


11/02/25
11/02/25

Feyzin bitumen output halted as part of wider stoppage

London, 11 February (Argus) — Bitumen production at TotalEnergies' 109,300 b/d Feyzin refinery near Lyon, central France, is halted from 10-20 February as part of a wider shutdown affecting the refinery's crude distillation unit (CDU) and reformer. Workers at the plant said last week there had been unexpectedly extended CDU works caused by a blockage by unspecified debris . TotalEnergies said at the time it would not comment on operations. Officials at the company confirmed today the CDU and reformer were among units shut at Feyzin, but said the halt was planned. They said the CDU had suffered no unexpected blockage or damage. Workers reiterated today that debris had been detected in the CDU and that this could result in a shutdown lasting weeks. Sources familiar with the refinery's operations said today that the bitumen halt would cause no supply disruptions in terms of the usual truck movements, with sufficient stocks held at the plant to meet current low-level requirements during the winter slow activity period in the road paving and other construction sectors. By Fenella Rhodes and Adam Porter Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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