Donald Trump’s tariff threats hinder Mexican stocks despite sector gains – London Business News | Londonlovesbusiness.com

Stocks in the Mexican market showed moderate activity after Wednesday’s session, with the S&P/BMV IPC index increasing by 0.20%.

Among the top gainers were Controladora Vuela Compañía de Aviación, up 5.97%, the Mexican Stock Exchange, which rose 5.51%, and Grupo Televisa, gaining 4.19%.

In contrast, Grupo Financiero Banorte fell by 2.80%, followed by declines in Alfa and Alsea, reflecting a mixed performance in the market.

However, despite the gains observed, the Mexican stock market remains under pressure due to external factors. Former President Donald Trump’s proposal to impose a 300% tariff on Mexican car imports poses a direct threat to Mexico’s crucial automotive sector.

This measure could severely impact export revenues and cause disruptions in supply chains, given that the Mexican economy is heavily interrelated with the U.S., particularly in manufacturing and auto parts. Any disruption in this regard could have serious economic implications for both countries. The opposition from U.S. Treasury Secretary Janet Yellen to these tariffs highlights the potential risks, as Trump’s plan to sanction companies like John Deere for moving production to Mexico could severely undermine bilateral trade and investment.

Adding to this are internal factors, such as the recent downward revision of Mexico’s economic growth outlook by the International Monetary Fund (IMF) and expectations of interest rate cuts by the Bank of Mexico. While a more relaxed monetary policy could stimulate economic activity, it could also discourage foreign investment, limiting short-term growth potential.

This scenario reflects a market that, despite some isolated gains, remains vulnerable to both internal and external risks, underscoring the complexity of the current economic outlook for Mexico.