Mexico’s Next President Must Get Three Key Relationships Right
Foreign policy is not high on the list of Mexican voters’ immediate concerns as they head to the polls on June 2. As with most voters around the world, they care more about basic economic issues including jobs and inflation. They want better security in response to the over 30,000 homicides per year and the growing influence of transnational criminals and drug trafficking organizations in Mexico. Finally, there is a concern among opponents of current President Andres Manuel Lopez Obrador, or AMLO, that democracy is under threat and corruption is on the rise, even as his supporters view their side as the democratic majority that has turned the page on the corruption of the political movements of the past.
Yet, all three issues—the economy, security and democracy—overlap heavily with foreign policy. Whether the winner is Claudia Sheinbaum of the ruling Morena Party or opposition candidate Xochitl Galvez, the next president must get Mexico’s relationships with the United States, China and Latin America right to succeed domestically.
Most important is the United States. Mexico is both blessed and cursed by its proximity to its northern neighbor. The two countries are each other’s largest trading partners, with well over $1 billion in merchandise crossing the border every day. That is vital to Mexico’s economic growth and for building the country’s middle class. And yet, every shift in U.S. politics and every bump in its economy is a potentially existential event for Mexico, but one that remains outside of its control.
Complicating matters for the next president, she will have to navigate the upcoming U.S. election, which is already shaping up to be impassioned, as well as whatever shifts in security and economic policies come from it. Every 12 years, the Mexican and U.S. presidential elections coincide, often leading to overlapping campaigns in which the developments on one side of the border impact the debate on the other. In 2024, questions about immigration and tariffs are high on the agenda in the race between U.S. President Joe Biden and former President Donald Trump. As if those two core issues weren’t enough, advisers to Trump’s team have developed plans for mass deportation of illegal immigrants, a substantial number of whom come from Mexico, as well as for potential covert military operations in Mexico to target drug trafficking organizations. Needless to say, both proposals would lead to major diplomatic crises in 2025 should Trump be elected and follow through on them.
Sheinbaum’s team, in particular, needs to plan for both possible outcomes in the U.S. come November. If Trump wins, she needs to find a way to turn AMLO’s surprisingly positive relationship with the former U.S. president during the two years their terms overlapped into an advantage in all the negotiations and crises that will follow. If Biden wins, she will want to turn the page on the two sides’ current narrow focus on migrants and find ways to improve relations and revive intelligence-sharing to counter security threats.
The next Mexican president needs to figure out how to successfully play the U.S. and China off against each other, or she will find herself trapped between the two superpowers as tensions between them rise.
No matter whether Biden or Trump wins, the next Mexican president needs to pursue policies that encourage Washington to continue and expand its embrace of “nearshoring,” while finding ways to make Mexico the biggest beneficiary of that trend. Improving Mexico’s electricity supplies for factories supporting cross-border supply chains will require dropping some of the energy nationalism that has defined AMLO’s term in office. Additionally, whether Biden or Trump ends up in the White House, immigration will remain a source of tension and perhaps even leverage in negotiations with the United States. Still, the next Mexican president should work to treat migrants more humanely simply because it is the correct thing to do.
Mexico’s relationship with the U.S. will in turn define its relationship with China. The nearshoring trend is in theory a threat to China’s economy, but in practice Beijing has looked to benefit by exporting more component parts to Mexico for final fabrication there, and by moving some manufacturing—including auto plants—to the country. The U.S. is attempting to preemptively block China’s access to Mexico and prevent it from benefiting from tariff-free trade under the U.S.-Mexico-Canada Agreement, or USMCA, the North American trade agreement that replaced NAFTA. China also wants to invest more in Mexico’s telecom sector, including building out 5G networks that the U.S. sees as a threat in terms of economic espionage and technology lock-in. The U.S. definitely wants to avoid scenarios in which China has any role in cross-border semiconductor supply chains that Mexico is hoping to benefit from.
Mexico’s next president will want Chinese investment to boost the economy but cannot afford to anger the U.S., its leading trading partner. As a result, she will find herself forced to balance the two sides. But if the U.S. tries to pressure Mexico to avoid Chinese investments, she will have every right to demand that the U.S. offers something in return. With the USMCA’s first joint review scheduled for July 2026, any renegotiation of its terms will be defined by how the next Mexican president uses the threat of ties with China as leverage to push back against U.S. protectionism. If the U.S. wants Mexico to downgrade Chinese economic ties, it will have to give in some other areas of the negotiation.
The relationship with China will also overlap with security given China’s role in providing precursor chemicals that are the basis for the production of synthetic drugs such as fentanyl and meth. Beijing’s unwillingness to target Chinese chemical exporters and money launderers has directly undermined Mexico’s security. China has threatened to halt cooperation with the U.S. on fentanyl in the past as leverage in other diplomatic discussions, knowing that the drug overdoses and crime related to illicit trafficking are top concerns in Washington. AMLO has largely looked the other way on this issue. The next Mexican president can definitely do more and should condition Chinese investments in Mexico on better cooperation on security issues that affect both Mexico and the United States.
Across that entire Mexico-US.-China triangle, the next Mexican president needs to figure out how to successfully play the world’s two superpowers off against each other, or she will find herself trapped between the two as tensions between them rise.
Finally, the next Mexican president needs to reset the country’s relationship with Latin America, which has been harmed by the current administration. AMLO’s regional engagement has been sporadic. He has largely ignored the hemisphere, but occasionally jumped into controversies to support ideologically aligned leaders, such as former Bolivian President Evo Morales and former Peruvian President Pedro Castillo after they were removed in 2019 and 2022, respectively. He also broke relations with Ecuador in April after Ecuadorian police raided the Mexican Embassy in Quito to arrest a former vice president who had been granted political asylum. In all of those cases, AMLO demonstrated that he is capable of holding grudges, but not of improving situations.
Perhaps the event that best symbolizes AMLO’s engagement with Latin America were his hosting of the Community of Latin American States, or CELAC, summit in 2021, to which he surprisingly invited Venezuelan President Nicolas Maduro, angering many of the other attendees. That was followed by AMLO’s failure to show up at subsequent CELAC meetings where he knew he wouldn’t be the star of the show. As a general rule, if an event is not all about AMLO, he doesn’t attend.
If she wins, Sheinbaum can set a different tone and agenda in the region, and doing so would help her with the rest of her foreign policy challenges. Given the overwhelming focus on U.S. issues in Mexican politics, it is not surprising that every Mexican president comes into office promising a greater focus on Latin America as a way of diversifying the country’s foreign policy options. More trade and better relations with countries to the south would indeed give Mexico greater flexibility and options in its foreign policy globally. Many of the country’s most recent challenges, including the surge of migrants at the U.S. southern border, are caused by political and economic issues in Latin America separate from what is occurring in Mexico.
Improving ties with Latin America will require Mexico’s president to show up and to lead, but that is a task that Mexico can succeed at if it tries. When it deals with the U.S. and China, no matter how much Mexican leaders talk about relationships among equals, Mexico is the smaller partner in both. But in working with Latin America, Mexico is a giant. It has enormous soft power in terms of companies, media and culture. And it has the trade agreement with the United States that every other country in the region wishes it had.
If Mexico assumes that leadership role in Latin America and helps coordinate the region’s global engagement, it will gain more leverage in its relationships with both the U.S. and China. It’s the policy that has the potential to deliver the most results in exchange for a reasonable commitment of time and resources. Mexican voters may not care much about the diplomacy as it happens, but if it is successful, the political benefits will follow.
James Bosworth is the founder of Hxagon, a firm that does political risk analysis and bespoke research in emerging and frontier markets. He has two decades of experience analyzing politics, economics and security in Latin America and the Caribbean.