Mexico's auto industry and peso stay steady after T‑MEC annual review

The United States activated the annual‑review mechanism for the Mexico‑U.S‑Canada trade pact (T‑MEC), keeping the agreement in force until 2036 instead of extending it for another 16 years. The move did not disrupt the Mexican peso, which UBS says remains robust thanks to expectations of continued access to the U.S. market and the attractiveness of its carry‑trade, while the Canadian dollar faces weaker prospects.

In San Luis Potosí, the regional automotive cluster views the decision positively. Cluster director Luis Alberto González Olvera noted that a clearer trade framework allows manufacturers to plan mid‑term contracts through 2026 and to target issues such as removing Section 232 tariffs and strengthening regional‑content rules. He said existing supply contracts with automakers in Mexico and the United States mitigate immediate production risk, and the sector expects continued investment in local parts production.

UBS warned that prolonged negotiations on the review could create uncertainty for firms and delay investment decisions across the three countries, but overall competitiveness of North‑American supply chains could improve if the pact is reinforced.