Mexico Equity Strategy: Navigating the rapids #2: still cautious on soft GDP/EPS growth, + US & MX relations

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Mexico Equity Strategy: Navigating the rapids #2: still cautious on soft GDP/EPS growth, + US & MX relations

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Mexico Equity Strategy

Navigating the rapids #2: still cautious on

soft GDP/EPS growth, + US & MX relations

Equity Strategy

Uncertainty will linger on trade & security issues with USA 13 July 2026

As we anticipated back in May, the Trump administration has declared it will not renew Equity Strategy

the USMCA agreement and will move to annual reviews until 2036. If at any point in the Mexico

next ten years all three parties agree on a trade deal, the trade agreement could be Carlos Peyrelongue >>

ratified and extended to 2036. For now, bilateral talks between the US and Mexico are Mex Eq Strat/Research Analyst

ongoing; three rounds, two down, one to go, see details page 2. Moreover, on security Merrill+52 55Lynch5201 (Mexico)3276

issues, last May the US Attorney for the Southern district of NY and the Administrator of carlos.peyrelongue@bofa.com

the DEA indicted 10 current & former Morena Mexican government officials. Moreover, Daniel Rojas Vielman >>

Todd Blanche, interim USA Attorney, warned more indictments could come (see page 2). ResearchMerrill LynchAnalyst(Mexico)

+52 55 5201 6248

What’s next? We see pragmatism beating out ideology daniel.rojas2@bofa.com

As for Mexico’s strategic roadmap, we see President Claudia Sheinbaum opting for the AlanResearchMaciasAnalyst>>

strategic path of least resistance on economic issues, potentially making concessions in Merrill Lynch (Mexico)

+52 55 5201 3433

areas such as labor enforcement, origin tracing (China), access to MX’s energy and alan.macias@bofa.com

infrastructure sector, critical minerals, but seeking reduction in sectoral tariffs under

Section 232.