Mexican Peso Steady as Trade Flows Offset Tariff Risk

Key Moments

Trade Dynamics Cushion Mexico and the Peso

Commerzbank analyst Michael Pfister argues that Mexico’s robust export performance to the United States and extensive adherence to USMCA rules have mitigated the impact of recent U.S. tariff shocks on both the Mexican economy and the Peso. According to his assessment, the structure and resilience of Mexico’s trade with the U.S. have reduced the pressure that might otherwise have been expected on USD/MXN.

Pfister notes that U.S. imports from Mexico rose in 2025, even against a backdrop of tariff-related uncertainty. He also points out that exemptions under the USMCA framework now apply to a substantial portion of bilateral trade, helping to preserve cross-border flows.

USMCA Compliance and Comparative Export Performance

Pfister emphasizes that Mexico’s high level of compliance with USMCA provisions has been a crucial factor in limiting the fallout from U.S. trade measures. In contrast to Canada’s greater exposure to sectors such as steel and aluminum, he observes that Mexico’s export profile to the U.S. has allowed it to weather tariff pressures more effectively.

He underlines this by stating:

“The high USMCA compliance has likely also saved Mexico. Compared to Canada (which is more dependent on steel and aluminum), Mexican exports to the US fared much better last year.”

Pfister further highlights the resilience of U.S. demand for Mexican goods over a specific period:

“Or to put it another way: US imports from Mexico in the period from August to December of last year did not decrease compared to the same period of the previous year, but actually increased slightly.”

Export Trends to the U.S. and Currency Implications

Looking at full-year figures, Pfister points to a notable divergence between Mexico and Canada in their export trajectories to the U.S. market:

“Overall, Mexican exports to the US in 2025 increased by almost 6% compared to the previous year, while they declined by almost 7% in Canada.”

He links these export trends directly to the behavior of the Mexican currency over the same period:

“These developments are likely to have been one of the main reasons for the peso’s strong performance last year. We also suspect that there will be no slump in exports this year.”

Banxico’s Policy Focus and USD/MXN Outlook

Given the resilience of Mexico’s external sector, Pfister suggests that the central bank, Banxico, can devote more attention to domestic conditions when determining its interest rate path. With U.S. trade policy posing less immediate risk than feared, he argues that weak growth at home can take on greater importance in the policy debate.

On the currency outlook, Pfister links potential moves in USD/MXN to geopolitical developments, stating:

“If the conflict with Iran ends, USD/MXN is likely to fall slightly again.”

Selected Trade Metrics Highlighted by Commerzbank