Expected constitutional and political changes in Mexico will upend the bilateral relationship with the U.S., causing chaos at the border and likely kicking off a trade war. The result will be economic stagnation in Mexico. Only the cartels pushing poison into both nations will benefit.
Mexico’s lame-duck president, Andrés Manuel López Obrador, known as AMLO, seems intent on passing a series of “reforms” to eliminate independent regulators or merge their offices with executive-branch agencies. A clear violation of the U.S.-Mexico-Canada Agreement, this would cripple investor confidence in the Mexican system. The flow of foreign direct investment from the U.S. would dry up.