Mexico Faces a Crucial Year as Trump and Domestic Pressures Converge

Mexico Faces a Crucial Year as Trump and Domestic Pressures Converge
A protest against a gasoline price hike, outside the National Palace, Mexico City, Jan. 9, 2017 (AP photo by Rebecca Blackwell).

A perfect storm is gathering in Mexico as the dawn of Donald Trump’s presidency north of the border coincides with domestic upheaval. While Trump’s threats on trade, immigration and border security have received the most attention, Mexico’s deeply unpopular president, Enrique Pena Nieto, also faces social unrest and a potential recession ahead of a presidential election in 2018—one in which, much as in the U.S., a populist underdog will look to capitalize on public anger.

Since Jan. 1, headlines from Mexico have been dominated not by Trump, but by the so-called “gasolinazo,” a controversial yet inevitable decision by the Pena Nieto administration to lift subsidies on gasoline prices in a bid to lighten the tax burden on debt-ridden state energy giant Pemex. The measure, implemented on New Year’s Day, sparked a price increase of 20.1 percent and widespread fuel shortages. Yet the public response has been fiercer than the government likely expected. Raucous demonstrations and sporadic violence and looting stretched from Tijuana, where U.S. authorities temporarily closed the San Ysidro border crossing Jan. 7, to the border with Guatemala. During the first week of January, rioters looted some 250 retail outlets, leading to 600 arrests and the death of a police officer.

The protests undoubtedly reflect a wider malaise. The one-two punch of Trump and low oil prices have seen the value of the peso plunge over the past year. Throughout the U.S. presidential race, the currency rose and fell according to Trump’s chances and hit a record low of 22.04 per dollar last week amid his threats of a “major border tax.” While Mexico has been trying to wean itself off its dependence on oil, which over the past decade supplied up to a third of the federal budget, low prices have forced substantial public spending cuts. Inflation is expected to rise by 4.6 percent in 2017, while the World Bank has revised its growth predictions for Mexico this year from 2.8 to 1.8 percent.

Keep reading for free!

Get instant access to the rest of this article by submitting your email address below. You'll also get access to three articles of your choice each month and our free newsletter:

Or, Subscribe now to get full access.

Already a subscriber? Log in here .

What you’ll get with an All-Access subscription to World Politics Review:

A WPR subscription is like no other resource — it’s like having a personal curator and expert analyst of global affairs news. Subscribe now, and you’ll get:

  • Immediate and instant access to WPR’s fully searchable library of 16,000+ articles
  • Daily articles with original analysis, written by leading topic experts, delivered to you every weekday
  • Weekly in-depth reports on important issues and countries
  • Daily links to must-read news and analysis from top sources around the globe, curated by our keen-eyed team of editors
  • The Weekly Wrap-Up email, with highlights of the week’s most important coverage, and what’s to come.
  • Completely ad-free reading.

And all of this is available to you when you subscribe today.

More World Politics Review