Claudia Sheinbaum Vows No Tax Increase, Focus on Infrastructure and Wages

Mexican President-elect Claudia Sheinbaum announces no plans to increase taxes, while committing to major infrastructure projects and raising the minimum wage. She vows to maintain social welfare programs and reorganize spending without deep fiscal reforms. Markets react with a dip in the peso amid political and judicial reform concerns.

Mexican President-elect Claudia Sheinbaum said on Wednesday that she has no plans to increase taxes for the general population but that her administration would continue to invest in major infrastructure projects and increase the minimum wage.

Sheinbaum, who will take office in October after winning a landslide election victory earlier this month, also guaranteed to maintain social welfare programs expanded under her predecessor and mentor President Andres Manuel Lopez Obrador. "Without deep fiscal reforms one can, with current income, reorientate (spending) to where it is needed," Sheinbaum told reporters.

The peso extended losses on Sheinbaum's comments, trading down 1.3% against the dollar. Mexico's currency has been hit hard since Sheinbaum, and her ruling Morena party, scored a huge election win on June 2. That win has given the ruling party's coalition a super-majority in the lower house and close to one in the Senate, putting it in a strong position to push through constitutional reforms.

Markets are especially concerned about a judicial reform proposed by Lopez Obrador, which would see judges elected by popular vote. Critics warn this could remove vital checks and balances on the president and lead to the political capture of the judiciary. Mexico's incoming president also said she thought the planned review in 2026 of the United States-Mexico-Canada Agreement (USMCA) will be "minor."

The review is seen as a major test for Sheinbaum's government and a particular risk for Mexico if former President Donald Trump wins the U.S. election in November.

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