Mexico: Illusions of Economic Grandeur

Mexico is a middle power and it has been "emerging" for as long as one can remember

Normally I don't have any thoughts on Mexico or Central America. It's just not an area that I focus on. However as Mexico doubles down on its radical agenda, I think it's worthwhile to add an opinion.

Trump’s recent proposal to impose a 25% tariff on all Mexican goods is more than a policy idea—it’s a reality check for a nation that continues to delude itself with dreams of independence. With over 80% of its exports flowing to the United States, Mexico isn’t a rising superpower. It’s a fragile, dependent economy, utterly tethered to American consumption and the decisions of Washington. For all its nationalist posturing, Mexico lacks the capacity—or the leadership—to break free from this dependency.

President Claudia Sheinbaum’s tenure exemplifies Mexico’s stagnant trajectory. Under her watch, corruption remains endemic, cartel violence spirals further out of control, and economic inequality festers. Instead of addressing these core issues, Sheinbaum has resorted to the usual empty rhetoric, blaming external forces for Mexico’s failures while avoiding the internal rot that has left the country incapable of self-sufficiency.

Here’s the hard truth: Mexico isn’t on track to become a global superpower—nor will it be in the next half-century. Its leadership, consumed by short-term thinking and political theater, has neither the vision nor the will to transform the nation into anything more than a junior partner in America’s backyard.

If Trump follows through on his tariff threat, Mexico won’t rise to the challenge. It will fold. The country is simply too economically reliant on the United States to do otherwise. The industries most affected—automotive, agriculture, and consumer goods—are cornerstones of the Mexican economy. A 25% tariff would cut deep, forcing Mexico’s hand, just as it did during USMCA negotiations and the Migrant Protection Protocols. When the stakes are high, Mexico’s leaders talk tough but inevitably cave. Then there's Canada. They are threatening to kick Mexico out of the USMCA because of issues with continued Chinese investment. This issue with Chinese investment in Mexico has also been discussed in the United States.

And it’s not just trade where Mexico’s vulnerabilities are glaring. Remittances—money sent home by Mexican nationals working in the U.S.—make up nearly 4% of Mexico’s GDP. This is a lifeline for millions of families and an economic foundation for rural areas. Yet it highlights another painful truth: Mexico cannot provide enough opportunity for its own people. If Trump increases deportations of undocumented workers, the resulting shock to Mexico’s economy would be immediate and devastating.

Then there’s the cartel problem—a shadow government that Mexico’s leaders refuse to confront head-on. Entire regions of the country are effectively controlled by organized crime, with cartels enforcing their own laws and wielding unchecked power. Sheinbaum, like her predecessors, has proven unable—or unwilling—to take meaningful action. The cartels are a domestic cancer, but they’re also a critical piece of the U.S.-Mexico relationship. If Trump decides to escalate the fight against cartels—perhaps through sanctions or direct military cooperation—Mexico’s fragile sovereignty would be laid bare once again.

Mexico’s leaders can continue pretending they’re on the brink of greatness, but the facts say otherwise. This isn’t just a critique of Sheinbaum’s administration—it’s an indictment of Mexico’s entire approach to governance. The country’s reliance on the U.S. market, its inability to control its own territory, and its failure to invest in meaningful reforms all point to a nation content to play the role of a subordinate.

Until Mexico confronts its dependency, tackles its internal chaos, and builds a truly self-reliant economy, it will remain what it has been for decades: a nation unable to stand on its own and unwilling to admit it. Trump’s tariff threat is just the latest reminder of Mexico’s reality. And if history is any indication, when push comes to shove, Mexico will bend.