Latin America Weekly: Mexico: tariffs, carve outs and Banxico

Mexico is the most exposed country to the auto tariffs that US President Trump announced this week and, while there are carve-outs for USMCA-compliant trade, these will probably provide little relief. This will only reinforce the dovish stance that Banxico adopted at its meeting this week. Absent large and abrupt falls in the peso, policymakers will probably continue to cut in 50bp steps over the coming months.

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