Basics

The United States and Mexico share a deeply interwoven relationship shaped by extensive economic ties, migration dynamics, and mutual security concerns. Mexico, the United States’ largest trading partner, facilitates the exchange of billions of dollars in goods annually through closely integrated supply chains, underscored by frameworks like the United States-Mexico-Canada Agreement (USMCA). This partnership extends to foreign direct investment and coordinated efforts to address migration and drug trafficking. As new administrations in both nations take office, their policies will influence key issues such as the USMCA’s renegotiation, judicial reforms in Mexico, and U.S. immigration enforcement. President Claudia Sheinbaum’s commitment to energy transition and judicial reform contrasts President-elect Donald Trump’s proposals for stringent immigration measures and economic tariffs. How these leaders address shared challenges, including migration and security, will define the future trajectory of U.S.-Mexico relations.

Historic Relations

The geographic proximity of the U.S. and Mexico necessitates a working relationship between the governments. The movement of goods, services, and people across the U.S.-Mexico border has defined this relationship and will continue to do so under new administrations on both sides. The U.S. and Mexico established and dissolved diplomatic ties multiple times in their history. The most recent reestablishment of a diplomatic relationship occurred in 1917.

Mexico is the U.S.’s largest trading partner, accounting for $322 billion in American exports in 2023 with a total of $807 billion in goods crossing the border. Closely integrated supply chains allow for this amount of trade. The U.S. is the largest contributor to foreign direct investment in Mexico, which came to $144.5 billion in 2023. The United States-Mexico-Canada Agreement (USMCA) reflects these close economic ties. All three parties to this treaty agree to reduce trade barriers between them and allow for the resolution of labor disputes via a Rapid Response Mechanism (RRM). Migration, especially migration from Mexico into the U.S., remains a concern for both governments. Previous presidential administrations in Mexico committed resources alongside the U.S. to address the root causes of migration. These efforts complement similar measures to enhance security in the face of drug trafficking. The U.S. provides funding for training, equipment, and technical assistance to bolster Mexico’s investments in institutions and personnel to reduce the impact of illicit drugs on American and Mexican communities, dismantle criminal organizations, reduce irregular migration, improve citizen security, reduce criminal impunity, combat illegal arms trafficking, and promote human rights and the rule of law. 47 ports of entry spaced out along a 2,000-mile-long border allow for the constant flow of people, ideas, and goods between the two countries. The incoming administrations resulting from the election of new presidents on both sides of the border will determine how this relationship will evolve. 

Mexican Politics and Political Parties

The Mexican government is organized as a federal republic of 31 states and the Federal District in Mexico City which acts as the seat of government. The Constitution of 1917 divides power between the judiciary, the legislature, and the executive. The states have structures similar to those of the federal government. Many states have a unicameral House of Delegates where elected delegates serve three-year terms. Governors serve as the executive for six-year terms and cannot be reelected. The federal Mexican legislative branch is divided into two houses, the Senate and the House of Deputies. Senators can be elected for up to two consecutive terms, and Deputies up to four consecutive terms. The nomination can only be made by the same party or any of the parties in the coalition that originally nominated them. In the Senate, 96 members are elected by plurality vote from multi-seat constituencies, and an additional 32 members are elected by proportional representation vote from a nationwide constituency. Out of the 500 members in the House of Deputies, 300 are elected by relative majority in single-member districts, and the other 200 are elected by proportional representation through party lists. 

Executive power rests with the president, elected by popular vote for a single six-year term. The president can issue executive decrees known as reglamentos, similar to executive orders, and has the power to select a cabinet, the attorney general, diplomats, high-ranking military officers, and Supreme Court justices with approval from the Senate. No vice president exists in the Mexican system, so if the president can no longer serve, the two legislative chambers elect a provisional president. On October 1, 2024, Claudia Sheinbaum Pardo was inaugurated as the first female president of Mexico. She is widely seen as a close ally of the previous president, Andrés Manuel López Obrador, and represents the same political party, Morena.

The National Regeneration Movement, commonly known as Morena, became a party in 2014 and officially participated in elections for the first time in the 2015 legislative elections. Morena is known as a left-wing party; its central issues include fighting corruption, economic austerity, energy nationalism, and protecting the welfare state. These issues are closely related to the priorities of Andrés Manuel López Obrador, the former president of Mexico, who built a coalition of politicians from various parties to form Morena. López Obrador left the Partido de la Revolución Democrática (Democratic Revolution Party), commonly called the PRD, because of members’ infighting. Before López Obrador’s departure, PRD ran presidential candidates in the 2000, 2006, and 2012 elections. PRD is recognized as a center-left party with centrist economic policies and increasingly liberal social policies. In contrast, observers label Morena’s economic policies to be left-wing, but some party leaders are not in favor of some liberal social policies such as same-sex marriage and abortion. 

While Morena currently holds the majority of political power in Mexico, the Partido Revolucionario Institucional (Institutional Revolutionary Party), more commonly referred to as the PRI, held power from 1929 until 2000. PRI positions itself as a centrist party that has historically attracted a wide range of voters. Its reign came to an end when PAN won the presidency in 2000. The Partido Acción Nacional (National Action Party or PAN) is a center-right political party, often aligning itself with the Catholic Church on social issues and following the doctrine of laissez-faire economics. Other nationally recognized parties include PT (Partido del Trabajo or Labor Party), a party committed to anti-capitalist ideas, and PVEM (Partido Verde Ecologista de México or the Mexican Green Ecological Party), whose platform centers on environmental conservation but has historically supported the party in power. 

Morena joined with PT and PVEM to form the Sigamos Haciendo Historia coalition. PRI, PAN, and PRD created the Fuerza y Corazón por México coalition in the Chamber of Deputies. 

The New Sheinbaum Administration

Observers expect the newly-elected President Sheinbaum to draw on her experience as the mayor of Mexico City. In this previous role, she focused on policies to improve security and infrastructure in the federal district. President Sheinbaum is also a climate scientist by training. The president has a PhD in energy engineering and degrees in physics and was part of the United Nations panel of experts on climate change that won the Nobel Prize in 2007. President Sheinbaum was elected alongside majority coalitions in the House of Deputies and Senate, giving her administration power to work on many of their priorities. 

Under her leadership, Mexico will likely continue its energy transition and shift to renewable sources. Her goal is for 45% of energy production to come from renewables by 2030. These goals depart from the policies of López Obrador, which generally allowed for the continued use of fossil fuels. President Sheinbaum does promise to strengthen the state-owned oil company, Pemex, but plans to impose a limit of 1.8 million barrels per day on oil production. 

President Sheinbaum is set to continue López Obrador’s commitment to eradicating corruption. Part of these reforms include changes to the judicial system. During his last months in office, López Obrador proposed reforms to the judicial system to root out corrupt judges and limit the power of organized crime. The proposed reform reduces the number of Supreme Court judges from eleven to nine, limits the length of their terms to twelve years, abolishes a minimum age requirement of 35, and halves necessary work experience to five years. Federal judges will also be able to work anonymously on organized crime cases. President Sheinbaum promised the reforms would bring “greater autonomy and independence” during her inaugural address. However, critics, including the U.S. and Canada, worry about the potential impacts on the independence of the judiciary if judges must appeal to voters to remain on the bench. Foreign investors depend on consistency in legal rulings and worry the popular election of judges would lead to inconsistent results. The Senate passed these reforms into law in September 2024 and passed a proposal to block challenges to these constitutional reforms. The first elections for federal judges, including Supreme Court justices, are set for June 2025. 

The New Trump Administration

The outgoing Biden Administration’s immigration policies focused on balancing the humane treatment of migrants with border security enforcement. Early in his term, President Biden halted construction of the border wall and reinstated protections for recipients of the Deferred Action for Childhood Arrivals (DACA) program. The Administration worked closely with Mexico to manage migration flows, encouraging regional cooperation and addressing the root causes of migration from Central America. This included agreements with Mexico to bolster border enforcement and programs like the U.S.-Mexico Bicentennial Framework, aimed at combating transnational crime. Despite efforts to create more orderly pathways for asylum and legal migration, the Administration faced criticism from both immigration advocates and enforcement proponents for challenges in managing the high number of migrants at the U.S.-Mexico border.

President-elect Donald Trump campaigned to tighten immigration policies from the Biden Administration and increase efforts to strengthen the American economy through tariffs. A central promise was to deport undocumented immigrants. Analysts believe nearly half the estimated 11 million people living illegally in the United States are Mexican. The incoming Trump Administration has made promises to declare a national emergency and use the U.S. military to deport these undocumented immigrants. Mass deportations would likely overwhelm the Mexican system, increasing unemployment and crime as these migrants return to the communities they left without income. 

The economic impacts of this plan would also hurt Mexico. Many migrants from Mexico to the U.S. send money — $63 billion in 2023 —  back to their families in their home country. Without this income, Mexico’s economy could experience a downturn. Additionally, President-elect Trump threatened 25% tariffs on Mexican imports unless the Mexican government decreased the number of drugs and migrants crossing the border. About 80% of Mexico’s exports go to the U.S., including vehicles, which could face a 100% tariff under the new Trump Administration. 

Many of President-elect Trump’s proposed policies could adversely affect Mexico. Observers wonder if President Sheinbaum will yield to the pressure. 

Looking Forward

One of President-elect Trump’s priorities is to go after drug cartels in Mexico using the U.S. military. President Sheinbaum is expected to continue López Obrador’s policy of using the Mexican armed forces to keep peace with the cartels, which proved to be futile during his term. However, should President-elect Trump choose to intervene, observers warn that American military raids or blockades would be ineffective and would violate Mexican sovereignty. Mexico has previously worked to manage flows of immigrants from other South American countries through Mexico to the U.S. and will likely continue to do so. Additional Mexican armed forces may also be used to control immigration from Mexico to the U.S. 

The review of the USMCA will play a significant role in how each administration approaches the other parties over the next two years. When the agreement was drafted, it included a sunset clause requiring the parties to the agreement to review and decide whether or not to renew it every six years. The first joint review will occur in 2026, but all three countries are starting to express their priorities for renegotiating. If one of the parties to the Agreement does not agree to a renewal, the Agreement would not end immediately but would start a ten-year clock on a joint renewal. Without confirmation of an extension, the Agreement would end in 2036, providing certainty for investors over the next decade and time to prepare.  

The review of USMCA will take place under the administrations of President-elect Trump and President Sheinbaum. President Trump oversaw the original composition of the USMCA during his first term and will be able to use the renegotiation to address American priorities. The U.S. Trade Representative (USTR) will take public comments and hearings throughout 2025 and then report its findings to Congress. Mexico is expected to begin talks with the U.S. following President-elect Trump’s inauguration in January 2025. How the two new administrations interact could set the trajectory for U.S.-Mexico relations for decades.