Summer's here, and we're living through quite the geopolitical moment. You might call it a scorcher, or the world seemingly set at boil. But one thing’s for sure; the stakes are high, and here at White & Case Mexico we'll continue to closely track matters for our clients and friends.

The U.S-China relationship remains a dynamic and contentious one. While reciprocal tariffs between the two countries remain in place, they decreased in mid-May from 145% back down to about 30% – at least for a 90-day period. However, in the last few weeks, tariff negotiations have stalled, following a combination of president Trump’s renewed crackdown on Chinese student visas and China’s ban on rare earth minerals exports. Talks remain sluggish, though, given both nations’ intertwined economic interests and deep technological competition.

Ukraine continues to be a central and devastating geopolitical reality. In May, frontline and Ukrainian city attacks by Russian forces intensified, at the time suggesting a weakening of Ukraine’s position. However, Ukraine’s successful offensive earlier this week – which destroyed dozens of Russian warplanes throughout Russia – demonstrated Ukraine’s scrappiness and a conflict that is still far from resolution. The attack is also an example of how drones are changing the nature of modern warfare.

In the Middle East, Israel has maintained an active offensive in Gaza, despite the slow-moving, but still technically active, ceasefire negotiations. Meanwhile, the Trump administration appears open to nuclear talks with Iran, in the face of two recent IAEA reports which found Iran to be actively stockpiling enriched uranium. The nuclear talks, coupled with the recent ceasefire announcement with the Houthis, has Israel feeling ever more territorially and militarily boxed in. 

India and Pakistan experienced a four-day military crisis in early May 2025, following a militant attack in Kashmir. First India, then Pakistan, retaliated by utilizing various military assets, including conventional ballistic missiles and drones. A ceasefire was agreed upon on May 10, though the brief conflict still represented the most serious escalation between two nuclear-armed rivals in decades, adding to the list of 2025 geopolitical hotspots.

With steel tariffs having gone into effect only 48-hours ago, tariffs remain central to U.S. domestic economic policy and significant attention is being given to the potential economic ripple effects. Despite the loosening of some tariffs, others remain in effect after an appeals court reinstated several "liberation day" tariffs that the Court of International Trade had initially struck down on May 29. The legal "on and off again" will come down to a decision on whether trade deficits legitimately constitute a national emergency. In the interim, the courts’ differing rulings are likely to undermine president Trump’s negotiating leverage.

Immigration also remains a critical piece of president Trump’s domestic policy. In May, the Supreme Court issued a preliminary injunction on Trump’s use of the Alien Enemies Act to deport Venezuelans to El Salvador. Even so, the administration has expanded the criteria for deportation or removal of status, including targeting international students. Moreover, in late May, the Supreme Court allowed the Trump administration to revoke the temporary protected status of more than 500,000 individuals who had been paroled into the United States for humanitarian reasons.

Here in Mexico, president Sheinbaum’s political agenda is also actively moving forward. On Sunday, the country held its first ever judicial elections, where Mexico’s electorate directly voted in judges. The elections were marked by voter turnout of only 13% compared to the more than 60% in last year’s presidential election. Mexico’s ruling party, Morena, came out on top, thus consolidating the dominant party's hold on Mexico's judiciary. While proponents argue that this move will promote transparency, critics express concerns about an weakened judiciary.

President Sheinbaum continues to publicly focus her agenda on domestic matters, including strengthening national industry and promoting domestic production and employment through Plan Mexico. The push for domestic production comes amid tariff concerns, a decrease in remittances, and a slowing economy. In late May, Banxico cut its 2025 GDP growth forecast from 0.6% to 0.1%. Despite a slowing economy, economists have ruled out a recession, for now. 

The Mexican economy’s stability will continue to depend heavily on its bilateral relationship with the United States as tariff negotiations and the USMCA review take shape. More immediately, analysts expect Mexico to request an exemption on the recently imposed steel tariffs.

Security cooperation and migration management remain critical bilateral policy items. Mexico has established the “Mexico Hugs You” campaign to receive Mexican deportees and continues to actively engage in a busing strategy which sends migrants apprehended in northern Mexico back to Mexico’s southern border. Mexico has also cracked down on fentanyl production and trafficking, leading to a significant decline in U.S. fentanyl seizures at the U.S. southern border.

On the international front, Canadian Prime Minister Mark Carney recently invited Sheinbaum to the G7 summit to be held in Alberta, Canada. And though she has not yet confirmed her attendance, her appearance would signal a welcome expansion of Mexico's foreign policy engagement. 

Lastly, I am working on something personal and would like to encourage you to join me in supporting the U.S. Women’s National Handball Team. If you're curious as to why I’m involved, or would like to support this project, you can click here. I'd be truly grateful if you would take a moment to consider this appeal. 

Sincerely, 

Antonio Garza