Mexican President Claudia Sheinbaum broke her silence on the United States midterm election on Wednesday, November 4, offering a measured response that focused less on the defeat suffered by President Donald Trump and more on what the results meant for Mexicans and for people of Mexican origin in the United States. She said the results reflected a sentiment among the American people, she highlighted two historic victories by candidates of Mexican origin, and she made clear that Mexico would continue to seek the best possible relationship with Washington while defending its sovereignty. At the same time, financial markets reacted to the election outcome, with the Mexican peso strengthening as the risk associated with the election faded. Trade conversations between the two countries, she said, continue as normal, even as the larger question of the future of the United States-Mexico-Canada Agreement, known as USMCA, remains unresolved.
Sheinbaum’s remarks were notable for their restraint. She did not predict whether pressure from Washington on Mexico would rise or fall after the election, and she did not offer a detailed assessment of how a Democratic Congress might change the dynamics of the bilateral relationship. Instead, she returned to a formulation that has defined her approach to the United States: Mexico will always seek the best relationship with the United States, always guaranteeing respect for its sovereignty, territorial integrity, and collaboration without subordination. That language is careful, and it is intended to convey both openness to cooperation and a firm limit on what Mexico will accept. It also reflects the reality that Mexico’s relationship with the United States is shaped by trade, migration, security, and geography, and that no single election, however significant, removes those structural facts.
The two victories Sheinbaum highlighted were both historic. In California, Xavier Becerra, the son of Mexican immigrants and a former Secretary of Health and Human Services under President Joe Biden, defeated Republican Steve Hilton and was elected governor. Becerra will become California’s first Latino governor in more than 150 years, a milestone that Sheinbaum noted with pride. In Texas, Gina Hinojosa defeated Governor Greg Abbott and became the first woman and the first person of Latino origin elected governor of Texas. Hinojosa’s victory was also historic in a state where Latinos form a large and growing share of the population, and where a Democrat had not won the governor’s office since Ann Richards in 1990. For Sheinbaum, who leads a country with deep ties to the Mexican diaspora in the United States, those two results were not only American political news. They were also a sign of the growing political presence of people of Mexican origin in the United States.
Sheinbaum Trump Midterm Reaction: Historic Latino Wins in California and Texas
Becerra’s election in California carries particular significance because of the state’s size and its large Latino population. California is the most populous state in the United States, and its governor is one of the most powerful state executives in the country. A Latino governor in California, the first in more than a century and a half, represents a change in who holds that office and in whose experience is reflected in its leadership. Becerra’s background, as the son of Mexican immigrants who rose to serve in the Cabinet in Washington, was part of the story of his campaign, and it was part of why Sheinbaum singled out his victory. His election does not by itself change the relationship between Mexico and California, but it does mean that the governor of the state with the closest economic and cultural ties to Mexico, after Texas, is a person whose family history is directly connected to that relationship.
Hinojosa’s victory in Texas is, if anything, even more striking. Texas has long been a Republican stronghold at the statewide level, and a Democrat had not won the governor’s office there in more than three decades. Hinojosa’s win, as the first woman and the first person of Latino origin to be elected governor of the state, breaks two barriers at once. It also shows that the state’s electorate is changing, and that Latino voters, who form a large part of that electorate, are playing a growing role in statewide elections. For Mexico, the election of a Latina governor in Texas, the state that shares the longest border with Mexico and the deepest trade ties, is a development of direct relevance. The governor of Texas has a voice on border, trade, and energy issues that affect Mexico, and Hinojosa’s background may shape how she approaches those issues, although it would be wrong to assume that her policy positions will simply mirror Mexico’s preferences.
Sheinbaum’s decision to highlight these two victories, rather than to comment in detail on the national balance of power in Washington, is consistent with her focus on the human and cultural dimensions of the relationship. She presented the election results as a reflection of a sentiment among the American people, a phrase that is broad enough to avoid a direct judgement on Trump or on the Democratic Party, while still acknowledging that the election was a significant event. That restraint may also reflect a practical consideration: Mexico must work with whoever holds power in Washington, and a president who comments too freely on American domestic politics risks complicating that work. By focusing on the Latino victories, Sheinbaum was able to mark the election as historic without taking a position on the partisan contest itself.
The Mexican Peso Climbs After the Democratic Sweep
Financial markets provided a more immediate measure of how the election was received. The Mexican peso rallied after the Democratic sweep, with the dollar-peso exchange rate trading at 18.59, down more than 1.29 percent, as the risk associated with the United States election faded. A fall in the USD/MXN rate means that the peso has strengthened against the dollar, because fewer pesos are needed to buy one dollar. That movement was reported on November 4, and it followed a period of uncertainty in which the peso had weakened. On the morning of November 4, the peso had traded at about 18.85 amid election uncertainty, before recovering as the results became clearer. Analysts at Monex had estimated that a full Democratic win could strengthen the peso by 1.0 to 2.5 percent in the following days, a forecast that the initial market movement appeared to support, although market movements in a single day are not a reliable guide to longer-term trends.
The peso’s reaction reflects the sensitivity of Mexico’s economy to political developments in the United States. Mexico is deeply integrated with the United States through trade, investment, and remittances, and uncertainty about American policy can affect the peso, Mexican interest rates, and investor confidence. An election that removes one source of uncertainty, even if it creates others, can lead to a recovery in the currency. In this case, the market appeared to interpret the Democratic sweep as reducing the risk of further escalation in trade tensions or in other areas of policy that affect Mexico, although that interpretation is a market judgement, not a statement of fact about what the new Congress will do. The peso’s movement should therefore be read as a signal of how traders assessed the election in the hours after the results, not as a prediction of the future course of trade policy.
That caution is important because the peso is affected by many factors, including interest-rate decisions, global risk sentiment, oil prices, and domestic economic data. A single day’s movement, even a large one, does not establish a trend. What it does show is that the election was a significant event for Mexican financial markets, and that the outcome was received positively by currency traders in the immediate aftermath. Whether that positive reception lasts will depend on what happens next, including the policy decisions of the new Congress, the stance of the Trump administration in its remaining time in office, and the course of trade negotiations between the two countries.
Banxico Rate Decision Due on November 5
Another date loomed over the market reaction: the monetary policy decision of the Bank of Mexico, known as Banxico, which was due on Thursday, November 5. The decision was expected to hold the policy rate at 6.50 percent, with market-based estimates putting the odds of a hold at about 60 percent and the odds of a cut at about 39 percent. Those figures were reported before the decision, and they reflect the uncertainty that surrounds any central-bank meeting. This article reports the decision only as due and expected, because the decision was due to be announced after the research for this article was completed. Its outcome must not be assumed, and any reporting of the result should be based on the Bank’s announcement itself, not on the expectations that preceded it.
The Banxico decision matters because interest rates affect the peso, inflation, borrowing costs, and economic growth in Mexico. A decision to hold rates steady would signal that the Bank is comfortable with the current stance of policy, given inflation and economic conditions. A decision to cut rates would signal that the Bank sees room to support growth, or that it judges inflation pressures to have eased. The market’s expectation of a hold, with a substantial minority expecting a cut, shows that the decision was not seen as a foregone conclusion. The outcome, when it is announced, will be watched closely in Mexico and in financial markets more broadly, and it will be one of the first major economic events to follow the United States midterm election.
USMCA Talks Continue Amid Annual Review
Trade between Mexico and the United States is governed in large part by USMCA, the agreement that replaced the North American Free Trade Agreement. The future of that agreement is now subject to a process that was set in motion at the first six-year joint review on July 1, 2026. At that review, the United States declined to renew USMCA in its current form, while Canada and Mexico supported a 16-year extension. The pact remains fully in force until July 1, 2036, but it now faces annual joint reviews until all three countries agree to extend it. That arrangement creates a recurring negotiation, in which the terms of North American trade are revisited each year, rather than being settled for a long period. It also creates uncertainty for businesses that depend on stable trade rules, because the agreement’s long-term future is not assured.
The United States Trade Representative opened a public consultation on October 2 for the 2027 joint review, with written comments due by January 12, 2027. That consultation is part of the process leading to the next review, and it gives businesses, labour groups, and other interested parties an opportunity to comment on how the agreement is working and what should change. Sheinbaum said that trade conversations with Washington continue as normal, a statement that suggests that day-to-day discussions have not been disrupted by the election, even though the larger question of the agreement’s future remains open. That distinction, between ongoing technical talks and the broader political question of renewal, is important for understanding the state of the relationship.
Bilateral talks on October 28, reported by Reuters, were aimed at an interim deal that would give Mexico relief from United States tariffs on autos, steel and aluminium, while addressing Washington’s concerns on automotive content and Chinese investment. No deal was reached before the midterms. Those talks illustrate the specific issues that are at stake in the trade relationship: tariffs on key Mexican exports, rules about how much of a vehicle must be made in North America to qualify for preferential treatment, and concerns about Chinese investment in Mexico that could be used to circumvent American trade restrictions. An interim deal on those issues would provide relief for Mexican exporters, but it would not resolve the larger question of USMCA’s future. That question will be addressed through the annual review process, and its outcome will depend on negotiations among all three countries, not only on bilateral talks between Mexico and the United States.
For now, Sheinbaum’s message is one of continuity and caution. Mexico will seek the best relationship with the United States, it will defend its sovereignty, and it will continue trade talks as normal. The historic Latino victories in California and Texas give that message a human dimension, and the peso’s rally gives it a market dimension, but the underlying challenges remain. The Banxico decision, the USMCA annual review, and the policy direction of the new Congress will all shape the relationship in the months ahead. Mexico’s president has made clear that her government is prepared to work with Washington, on terms that respect Mexico’s independence, and that it will judge the new political landscape in the United States by its actions, not only by its election results.
Sources
USN reviewed reporting from multiple outlets for this story. Read more from FXStreet, Vive USA and Congressional Research Service.