Mexico - June 2026

The first article in this June edition of the Latin American Regional Report: Mexico concerns the indictment that the US Department of Justice unsealed against four current Mexican officials, including a state governor and federal senator, and six former officials on 29 April. The indictment marked a turning point in US President Donald Trump’s campaign against Mexican drug cartels, from targeting cartels’ main criminal actors and financial networks to the politicians allegedly colluding with them. It also directly implicates officials from the ruling Movimiento Regeneración Nacional (Morena), handing President Claudia Sheinbaum a timebomb in terms of handling internal party dynamics. The apparent lack of forewarning from the US has also struck a nerve amid heightened tensions over US involvement in Mexican security issues.

Next, we turn to relations with Spain, following the recent visit of Spain’s Foreign Minister José Manuel Albares to Mexico. In recent years, relations between the two countries have been defined by a diplomatic dispute over the legacy of Spanish colonial rule in Mexico. In recent months, changing geopolitical headwinds and a growing affinity between the countries’ political leaderships have given rise to a carefully managed process of normalisation in bilateral relations, to which Albares’ visit paid testament.

The following piece looks at the start of trade negotiations between Mexico and the US – but without Canada – ahead of the mandatory joint review scheduled for 1 July of the US-Mexico-Canada Agreement (USMCA). The first official round of the negotiations aimed at extending the free trade pact for 16 years took place on 28-29 May, with two further bilateral rounds between the US and Mexico due to follow.

After, we consider the downgrade of Mexico by international credit rating agencies in May over a broad range of concerns, including a deteriorating fiscal position, rising debt levels, sluggish economic growth, and the punitive burden of ongoing financial support for the state-owned oil company, Pemex. Investor uncertainty over the current review of the USMCA trade pact and the budgetary impact of the Middle East conflict have further fuelled worries, as this article explains.

The final piece in this issue examines the updated trade agreement signed between Mexico and the European Union (EU) on 22 May. The deal updates an agreement that had been in force since 2000 and will introduce a number of new rules designed to encourage trade and investment, with tariffs eliminated on most goods and trade barriers on critical minerals removed.