Banamex analysis of U.S. midterm election outcomes and USMCA continuity, Digi Mart USA News: The expected results of the U.S. midterm elections are moderately favorable for Mexico in terms of institutional predictability and continuity of the Mexico-United States-Canada Agreement (USMCA), Banamex said in an analysis released this afternoon.
The bank warned, however, that this scenario would also mean higher compliance costs for maintaining preferential tariff treatment. Banamex said the new environment would tend to favor companies integrated into regional supply chains, but would be more restrictive for those dependent on Asian inputs or Chinese capital.
Banamex said automotive protectionism would shift toward rules of origin, because Democrats would not reduce pressure on the Mexican sector but could direct some protectionist measures toward higher regional content requirements, input traceability and labor value. The bank said this agenda is highly likely to have bipartisan support.
Citing the Office of the U.S. Trade Representative, Banamex said the U.S.
vehicle and auto parts deficit with Mexico rose from $91.9 billion in 2019 to $138.2 billion in 2024, while U.S. content in vehicles produced in Mexico fell from more than 60 percent in 2017 to about 35 percent in 2024, accompanied by a greater share of Chinese and other Asian inputs.
On industrial policy, the bank said it would maintain broad bipartisan support, since Republicans and Democrats both favor relocating production chains, semiconductor manufacturing, the defense industry, critical minerals and reducing technological dependence on China. The difference, Banamex said, will lie in the instruments used to implement that vision.
Banamex said Trump would maintain his preference for tariffs, U.S. content requirements and support for fossil fuels, while a Congress controlled by Democrats would seek to preserve tax credits, clean manufacturing subsidies, labor requirements and resources for the electrical grid.
On energy, the bank said this combination would likely lead to a hybrid agenda, with continuity for oil and gas, greater protection for clean investments and bipartisan support for nuclear energy, electrical transmission and critical minerals.
