S&P Predicts Investor Uncertainty, Weak Growth for Mexico Amid T-MEC Revision

Mexico faces a landscape of persistent investor uncertainty and sluggish economic growth as negotiations to revise the USMCA (T-MEC) trade agreement continue, S&P Global Ratings has warned.

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Mexico will face an environment of persistent uncertainty for investors and weak economic growth as negotiations to revise the Treaty between Mexico, the United States, and Canada (T-MEC) continue.

With no new agreement reached by the July 1 deadline, the treaty remains active and subject to annual reviews for the next decade. The next round of talks is scheduled for late July. Central to the discussions are strengthening rules of origin, promoting regional supply chains to decrease dependence on Chinese inputs, and addressing sector-specific issues like Mexico's energy policy.

Despite trade tensions, S&P anticipates Mexico will maintain favorable access to the U.S. market, given the deep economic ties between the two nations. Bilateral trade reached $801 billion in 2025, and Mexican exports to the U.S. saw an 8% increase that year. S&P views a complete rupture of the trade relationship as unlikely.

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Mexico will maintain favorable access to the U.S. market, better than most countries, despite trade tensions.

However, the rating agency cautioned that extended negotiation periods will sustain investor uncertainty, thereby constraining investment and economic growth. S&P projects Mexico's GDP to grow by approximately 1% in 2026. This combination of low growth and tighter budgetary constraints limits the government's fiscal consolidation efforts, a key factor behind S&P's revision of Mexico's sovereign rating outlook from stable to negative in May.

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a prolonged period of negotiations will maintain uncertainty among investors, which will continue to limit investment and economic growth.