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Members of Mexico's National Guard queue to board a vehicle upon disembarking from a plane, after Mexican President Claudia Sheinbaum agreed with U.S. President Donald Trump to bolster border enforcement efforts in response to Trump's demand to crack down on immigration and drug smuggling, in Tijuana, Mexico, on Feb. 4, 2025.
HARD NUMBERS: Mexican troops head to the border, Carney promises defense binge, Critics call on Canada to suspend US agreement, Tariff talk tops tickers
7,000: Earlier this week, at least 7,000 Mexican troops were on their way to the US-Mexico border as part of Mexican President Claudia Sheinbaum’s deal with the Trump administration to postpone, for one month, the imposition of a 25% US tariff on all Mexican goods. Experts say that the deployment, meant to meet Trump’s demands that Mexico crack down on fentanyl traffickers and illegal migrants, represents a reshuffling among the tens of thousands of troops that Mexico already deploys throughout the country to tackle these issues.
2 in 5: Mark Carney, who is campaigning for the Liberal Party leadership, has pledged to meet a target of spending 2% of GDP on defense. That would be two years earlier than stipulated under current commitments made by outgoing Prime Minister Justin Trudeau. The matter has taken on fresh urgency in light of US President Donald Trump’s demands that NATO allies raise the benchmark to 5% of GDP – and his threats to annex Canada.
21: Immigration advocates and lawyers are calling on Ottawa to suspend a 21-year-old agreement with the United States under which Canada sends asylum-seekers apprehended at the border back into the US for processing. Critics say that the Trump administration’s recent moves to drastically restrict refugees’ access to asylum petitions fall afoul of international law, and they warn that Canada should not be complicit in these violations by sending people back to the US.
200: What’s the word among Wall Street analysts these days? Tariffs. Tariffs. Tariffs. So far this year, the term has come up at least once in more than 200 earnings calls with top companies listed on the S&P, a major stock index of American firms. The big question, of course, is how are companies planning to cope either with higher US tariffs themselves, or with the broader political and economic uncertainty about if, when, and how heavily Trump will use them.Mexico's President Claudia Sheinbaum holds a press conference in Mexico City, Mexico February 3, 2025.
Trump strikes last-minute tariff deal with Mexico and Canada – but not China
With hours to spare, President Donald Trump hit pause on a North American trade war, reaching agreements with both Mexico and Canada to delay the imposition of 25% tariffs that had businesses and markets sweating.
The deals, brokered after multiple calls with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, postpone the application of tariffs by 30 days while both countries work to secure their borders with the United States. Mexico agreed to deploy 10,000 troops to curb drug smuggling and illegal immigration, while Canada appointed a fentanyl czar and committed to a Canada-US Joint Strike Force targeting drug trafficking and organized crime.
There was no movement, however, with Beijing. Ten percent tariffs on Chinese imports took effect at 12.01 a.m. on Tuesday, prompting China to hit back with additional tariffs (both countries already had some tariffs in place) on liquefied natural gas, coal, farm machinery, and various other US products. Beijing also imposed new export restrictions and launched an antitrust investigation into Google. Earlier, Beijing said it would challenge the tariffs before the World Trade Organization.
Trump has also warned that tariffs on the EU are coming, prompting UK Prime Minister Keir Starmer to insist that Britain won’t pick sides between the US and the EU, despite his push for closer relations with the continent.
While Mexican and Canadian businesses and consumers breathe a sigh of relief, Trump’s hardball negotiation tactics may negatively impact relations with both countries, particularly Canada, in the longer term. Canadian leaders have said they will actively pursue trade deals with other partners, there has been speculation about Canada joining the EU, and there remains uncertainty about whether the United States remains a trusted ally after Trump forcefully repeated his hope that Canada would become the 51st state – just an hour before his final conversation with Trudeau.
Migrants line up to leave the United States for Mexico after being deported across the Paso del Norte international border bridge after President Donald Trump promised mass deportation operation, as seen from Ciudad Juarez, Mexico, on Jan. 23, 2025.
How Mexico is preparing for Trump’s mass deportations
The initiative, called “Mexico Embraces You,” aims to build nine migrant reception centers along the US border, and employ all 34 federal agencies and 16 state governments to repatriate and resettle returnees. The program intends to enroll people in pensions, paid apprenticeships, and other social welfare initiatives, and to distribute cash cards worth about $100 each. It will also bus people back to their hometowns.
Critics say Mexico is ill-equipped to handle the influx and accuse it of benefiting from migrant remittances, which boost foreign exchange, domestic incomes, and economic growth, while lacking a system to support repatriation. Some wonder what migrants will do once they return since many fled because of violence or lack of opportunity.
Mexican President Claudia Sheinbaum has expressed disagreement with Trump’s “unilateral” mass deportation decision, but with the US planning to implement 25% tariffs to force Mexico to crack down on the border, and the flood of migrants seemingly on their way back regardless, she has little choice but to prepare her country to receive them.President Donald Trump talks with Canada's Prime Minister Justin Trudeau during a North Atlantic Treaty Organization Plenary Session at the NATO summit back in 2019.
Mexico and Canada mull trade maneuvers as Trump proposes “External Revenue Service”
Incoming US President Donald Trumpposted on Tuesday that he will create an “External Revenue Service” to oversee his planned trade tariffs, underlining his commitment to these policies – much to the chagrin of America’s neighbors.
“We will begin charging those that make money off of us with Trade, and they will start paying, FINALLY, their fair share,” wrote Trump.
The news came a day after Mexican President Claudia Sheinbaumlaid out a plan to decrease Mexico’s trade deficit with China in what was widely seen as an olive branch to Trump.
By aligning more closely with Trump against China, Sheinbaum hopes she can carve out a special exception for Mexico, and a stronger hand in renegotiations of the US-Mexico-Canada trade agreement. Her administration has already cracked down on the import of counterfeit goods from Asia and placed tariffs on Chinese e-commerce platforms Shein and Temu. She also plans to cut down on reliance on imports for textile and auto manufacturers based in Mexico — but whether that will spare her the wrath of the ERS is yet to be seen.
North of the border, meanwhile, outgoing PM Justin Trudeau is also working on a plan to defend Canada’s trade interests with the US. He will hold a cabinet retreat next week to hammer out a potential response to Trump’s tariffs.Mexico's President Claudia Sheinbaum shows a 1661 world map showing the Americas and the Gulf of Mexico in response to US President-elect Donald Trump's comments about renaming the body of water, during a press conference at National Palace in Mexico City, Mexico, on Jan. 8, 2025.
Hard Numbers: Ring of “América Mexicana,” Canada to the fire rescue, Students’ stingy stipends, Ghost crimes soar
418: What was the United States called before it was the United States? “Mexican America,” according to a 418-year-old map shown by Mexican President Claudia Sheinbaum at a press conference on Wednesday. “It sounds nice,” she said, “no?” The display was meant as a clapback to US President-elect Donald Trump’s proposal a day earlier to rename the Gulf of Mexico “the Gulf of America.”
2: Two Canadian planes are helping California to battle the massive wildfires currently raging near Los Angeles. The two Canadair CL-415s are specialized bombers that can fill their bellies with fresh or salt water to dump on fires. Canada has been sending firefighter aircraft to California seasonally for three decades.
9,500: If you want to do a PhD in biology or physics in Canada, you’d best be financially secure before you start. The average stipend for Canadian graduate students studying those subjects leaves them CA$9,500 (US$11,900) below the poverty line, according to a new study in the journal Nature. To keep pace with the cost of living, stipends would have to increase by 150%.
1,600: The United States is becoming a “ghost” town, at least when it comes to firearms. The number of privately made, untraceable “ghost guns” found at crime scenes each year surged from about 1,600 in 2017 to more than 27,000 in 2023, an increase of some 1,600%. Later this year, the US Supreme Court will rule on the legality of a Biden administration effort to crack down on these weapons.
Mexico's President Claudia Sheinbaum speaks, on the day of the 114th anniversary of the Mexican Revolution, in Mexico City, Mexico November 20, 2024.
Constitutional changes target regulatory agencies in Mexico
The lower house of Mexico’s Congress approved the text of a constitutional proposal to scrap oversight bodies on Wednesday, a first step in the ruling Morena party’s goal of eliminating autonomous institutions and consolidating power.
The change is just the latest in a series of reforms begun under former President Andrés Manuel López Obrador and carried out by his successor, Claudia Sheinbaum. Plans include overhauling the energy sector and judicial system, and guaranteeing a minimum wage that stays above inflation.
The bill passed by the lower house moves agencies overseeing government transparency, telecommunications, antitrust, energy, education, social policy, and other regulators under the jurisdiction of the executive branch, removing their institutional autonomy. It passed 347–148 and only needs one vote to pass the Senate before the legislative period ends on Dec. 15.
Sheinbaum backs the proposal, arguing that regulators are inefficient and that eliminating them will save taxpayer dollars. But her party has put forward a compromise to appease critics: decentralized agencies to ensure that antitrust and communications regulators remain independent, even as they are absorbed under the executive’s umbrella. The compromise is also meant to ensure the constitutional changes don’t contradict the terms of the trade deal with the US and Canada — which requires Mexico to have independent oversight bodies — ahead of renegotiations in 2026.
Mexico City’s Mayor Claudia Sheinbaum poses for a picture during an interview with Reuters in Mexico City, Mexico September 22, 2022.
Mexico’s first female president takes the reins
Claudia Sheinbaum will be sworn in as Mexico’s first female president — and first of Jewish heritage — on Tuesday, succeeding the wildly popular Andres Manuel López Obrador, whose shadow hangs heavily over the prospects for her administration. She won the June election with 60% of the vote, but as much as the people may support her, the left-leaning populist agenda she has promised to continue pursuing doesn’t always sit right with the investors the Mexican economy needs.
World leaders will be in attendance, including presidents of Brazil, Bolivia, Chile, Cuba and Guatemala, and a large US delegation led by first lady Jill Biden. However, Canadian Prime Minister Justin Trudeau will send his deputy prime minister in his place, and Russian President Vladimir Putin, whose invitation stirred controversy, will not attend. Argentinian President Javier Milei is also likely to skip, given his ideological opposition to Sheinbaum and AMLO’s left-wing ambitions.
After the celebrations, Sheinbaum has plenty on her plate. Far too many Mexicans face severe threats to their personal and communal safety from drug violence and corruption. Eurasia Group analyst Matias Gomez-Leauteaud says he’s watching how the new president addresses security in her inaugural speech, but such long-term goals may stay on the back burner for the moment.
“There are two key decisions for her in the short term, both related to economic policy: The 2025 budget, which must be presented at the latest on Nov. 15, and her selection of a new central bank deputy governor," he says. We’re watching whether Sheinbaum’s decisions can halt the slide of Mexico’s peso, which has fallen 14% against the dollar since she was elected.Mexico's President Andres Manuel Lopez Obrador hands over a ceremonial baton of command to Claudia Sheinbaum after she was elected by the ruling National Regeneration Movement (MORENA) as its candidate to succeed him in 2024 in the presidential election, in Mexico City, Mexico September 7, 2023.
Mexico’s president-elect pushes controversial judicial reform
In her first press conference since winning the Mexican election in a landslide earlier this month, president-elect Claudia Sheinbaumbacked a highly controversial plan to introduce a popular vote for the country’s Supreme Court justices.
The reform is the brainchild of current President Andrés Manuel López Obrador, aka AMLO, a charismatic left(ish) populist whose Morena party won a supermajority in Congress and fell just shy of one in the Senate.
Directly electing Supreme Court justices via popular vote would put Mexico in the company of just one other country that we know of: Bolivia, where AMLO’s ideological cousin Evo Morales instituted the practice in 2009.
AMLO and his supporters say the move would introduce more accountability to a system long dominated by corrupt elites.
But critics say it would dangerously politicize the justice system, upending the rule of law right as Mexico tries to catch an investment boom from “nearshoring” – that is, the trend of US-oriented companies moving their factories out of Asia as a way to skirt US-China trade tensions and avoid future global supply chain issues.
The skeptics could be right: The Mexican peso fell 2% after Sheinbaum’s comments.