From the devastation in the wake of Hurricane Helene in the U.S. southeast to an expansion of the conflict in the Middle East, there is a lot going on in the world right now. Today, though, I want to focus on Mexico’s political transition.

On Tuesday, Claudia Sheinbaum – a climate scientist and career public servant – was inaugurated as Mexico’s newest president. An historic election by all counts, Sheinbaum acknowledged that she is the first woman to hold presidential office, declaring in her inauguration speech that “it’s time for women”. She takes the reins with a strong political mandate after her Morena coalition won majorities in both houses of Congress and two-thirds of state legislatures during the country’s June elections.

Inheriting a political system built around her predecessor, one of Sheinbaum’s first, and likely ongoing, tests will be to find a way to step outside her longtime mentor’s shadow. During her inauguration speech, Sheinbaum promised “continuity with change.” What that means is yet to be seen. However, Sheinbaum’s actions since her election have included taking a farewell tour with the former president, backing Lopez Obrador’s efforts to militarize the National Guard, and supporting the controversial judicial reforms he jammed through Congress in September, although he left a number of items pending.

The newly inaugurated president also faces a slew of other hurdles. Economically, Mexico’s economy did settle in September with inflation slowing more than expected. In response, Banxico once again cut interest rates down to 10.5%. However, investors remain rattled by Morena’s concentration of power with the peso falling more than 10 percent since Sheinbaum’s election.

At the same time, several disputes with multinational companies continue. On September 30, Vulcan Materials announced plans to take further legal action following years of arbitration after Lopez Obrador’s revocation of the company’s port concessions in 2018. In another case, Mexico’s antitrust regulator Cofece has alleged that Walmart Mexico was imposing prices on its suppliers and distributors; a charge that Walmart has denied.

On trade, Mexico is increasingly diverging from North America, which will likely cause tensions as the USMCA’s upcoming 2026 mandatory review draws nearer. During her inauguration speech, President Sheinbaum attempted to reassure Mexico’s North American partners, promising to prioritize North American economic cooperation. She and Economy Secretary Ebrard have also named former Mexico City finance chief Luis Rosendo Gutiérrez Romano to serve as USMCA trade representative.

Then, there’s the resource challenges that president Sheinbaum inherits which range from electrical grid failures to renewable energy needs to water shortages. Among her first plans of action, Sheinbaum has promised that Mexico’s Congress will begin discussing energy reform in the days following her inauguration and has pledged to reach 45 percent renewable energy in Mexico by 2030.

The security situation in Mexico has also only worsened in recent weeks following a new turf dispute between factions of the Sinaloa Cartel which have left dozens dead. This dispute comes after the United States’ contested capture of Ismael Zambada (El Mayo) in July, which only further strained security relations between the two countries. Finally, along the U.S.-Mexico border, fentanyl trafficking continues to rage on, which will require real security cooperation between the United States and Mexico.

Despite tensions to the bilateral relationship on the economic and security fronts, immigration cooperation between Mexico and the United States is at a high. In September, CBP reported around 54,000 migrant encounters along the U.S. southern border – the lowest levels since 2020. These statistics are in part explained by Mexico’s policy to bus only migrants with a verifiable CBP One appointment to the U.S. border. The future of immigration cooperation by the Sheinbaum administration will likely depend not only on the new administration’s priorities but also on the outcome of the United States’ upcoming elections.

At the end of 2023, I wrote to you about the historic numbers of elections being held worldwide in the coming year. While so much of the news and commentary over the course of this year has oscillated from crisis to crisis, as Francis Fukuyama wrote in one of his latest commentaries “the year of elections has been good for democracy.”

As 2024 quickly comes to a close, it is now time for the United States to hold its own elections. Early voting is underway, and the GOP has already begun laying the groundwork for legal challenges should former president Trump not be declared the winner. With some 33 days to go, Americans will elect a new president very shortly, though in the end it will likely come down to just a few thousand votes in a handful of swing states.

As you can well imagine here at White & Case in Mexico City, we will be monitoring these election and political transition events closely. Before I close, I would like to congratulate my White & Case colleagues for once again securing top rankings in Chambers’ guides of top law firms in Latin America for 2025.

For now, I hope you are well, and I look forward to staying in touch with you via Twitter and LinkedIn.

Sincerely, 

Antonio Garza