Mexico, a commercial destination appreciated for its low tariffs

Mexico is gaining prestige as a trade destination because the tariffs imposed by the United States are lower than those that that country applied to China, said Carlos Capistrán, chief economist for Mexico, Latin America and Canada at Bank of America.

“Is Mexico losing prestige as a trade destination to supply the United States? No, it is gaining, because when the United States put tariffs on everyone, we said that Mexico’s effective tariff is lower than the others,” he commented in an online conference from New York.

He explained that Mexico competes directly with China for the United States market in manufactured products and that the Asian country’s tariff rose to levels of 30 to 40 percent, while Mexico’s is 5 percent.

“Yes, 10 years ago the two tariffs were zero and have risen a lot, but China’s much more. That is why we believe that Mexico has to take advantage of this moment to grow more,” he stated.

He explained that foreign investors feel comfortable with Mexico’s risk profile when they compare it with countries like Brazil and Colombia. “The investors I speak with do not see that Mexico has a greater global risk than other countries; on the contrary.”

However, I reiterate that the accumulated 8 percent drop in Mexico’s productivity in the last 10 years prevents greater growth.

The country grew 2 percent on average for many years, a level that the analyst considered low, but recently the average has been barely half that, “a very, very low rate, and it has not been for one year, but for several,” he highlighted.

By 2026, Bank of America estimates that Mexico will grow 1.2 percent, a moderate recovery compared to the 0.4 percent increase in 2025.

Capistrán explained that per capita growth – which is adjusted for the size of the population – has remained stagnant in the last 10 years, at levels of 5 percent, according to databases that he compared with statistics from different international organizations, such as the World Bank and the Organization for Economic Cooperation and Development.