Financial Stability Council warns: tariffs and market adjustments could increase pressure on Mexico’s finances
Mexican financial authorities once again put a risk on the table that, while external, can have direct effects on the domestic economy: the imposition of tariffs and a potential repricing of financial assets. The Financial System Stability Council (CESF, by its Spanish acronym) warned that a renewed escalation of trade tensions with the United States remains one of the main watchpoints for financial stability, given the high degree of production integration between the two countries and the importance of foreign trade to the performance of key sectors.
After its regular meeting, the CESF said its global baseline scenario calls for a slowdown in economic activity in 2025 and 2026, followed by a recovery toward 2027. In that environment, the council underscored the need for international authorities to keep a close eye on markets and the financial system to prevent dysfunctions, especially during bouts of volatility. For Mexico, weaker global momentum typically translates into softer external demand, pressure on supply chains, and greater investor caution—potentially affecting exports, investment, and employment.
On the domestic front, the council highlighted financial conditions that, for now, appear orderly: low market volatility and a roughly 2% appreciation of the peso against the dollar over the period referenced. Still, it noted the outlook faces “downside risks.” In practice, this means shocks such as new tariffs, higher logistics costs, or abrupt changes in expectations could show up in the exchange rate, risk premiums, and the cost of funding for businesses and households, even if the banking system remains sound.
The CESF assessed Mexico’s financial system as resilient, with the capacity to absorb shocks without impairing its core functioning. It attributed that strength to the fact that commercial banks operate with capital and liquidity levels that comfortably exceed regulatory minimums. That position matters at a time when credit growth in Mexico is uneven across segments and borrowing costs have remained high for an extended period, consistent with Banco de México’s restrictive monetary stance aimed at cementing inflation’s decline toward its target.
The council also pointed to certain nonbank financial institutions that show risk indicators warranting monitoring, although—according to its assessment—they do not represent a systemic threat. In a country where financial intermediation includes sofomes (nonbank lenders), fintechs, insurers, and pension fund managers, monitoring is important because stress episodes often surface first in segments most sensitive to liquidity, funding, or asset quality before spreading to the rest of the system through confidence channels or tighter credit conditions.
The backdrop is a Mexican economy that is particularly exposed to the U.S. trade agenda—not only because of the volume of exports, but also due to deep manufacturing integration—autos, electronics, medical devices—and the importance of nearshoring-related investment. A more protectionist environment or more aggressive reviews of trade policy could delay investment decisions, reshape supply routes, and squeeze company margins, especially for firms that rely on imported inputs or sell primarily into a single market. At the same time, the prospect of production relocation remains a potential counterweight, as long as it translates into concrete projects and Mexico addresses bottlenecks such as energy, water, security, logistics infrastructure, and regulatory certainty.
Looking ahead to 2026 and 2027, the CESF expects a recovery, though conditioned on the external environment not deteriorating and on domestic financial stability holding. For households and businesses, that plays out in concrete variables: the path of inflation and interest rates, the exchange rate, formal job creation, and the evolution of credit. In that sense, the council’s signal is twofold: the financial system looks strong, but the main risk comes from external shocks that can quickly change market and investment conditions.
The CESF is made up of the Ministry of Finance, Banco de México, the National Banking and Securities Commission (CNBV), the National Insurance and Surety Commission (CNSF), CONSAR (the pension regulator), and IPAB (the bank deposit insurance institute), among other representatives. Its role is to coordinate diagnosis and preventive responses to risks that could affect system stability.
In perspective, the core message is that Mexico starts from a position of well-capitalized banks and relatively stable markets, but faces an international environment in which tariffs and valuation adjustments can turn into meaningful shocks. Oversight of nonbank intermediaries and attention to the factors that support investment—especially investment tied to trade with the United States—will be decisive if the economy is to take advantage of the expected recovery while limiting downside risks.
