Fireworks exploded over Puerto Vallarta last weekend as it celebrated two important anniversaries. (Facebook/Gobierno de Puerto Vallarta)
Puerto Vallarta put on its finery last weekend as the city celebrated two linked milestones with the kind of pageantry that makes locals swell with pride and visitors grab for their phones or cameras.
From May 29 to 31, the city celebrated 108 years since it became a municipality in 1918, and 58 years since it was declared a city in 1968. In true Vallarta fashion, it marked the anniversary with a blend of ceremony and music, and a sky full of drama.
A joyous milestone weekend
After 108 years as a municipality and 58 as a city, Puerto Vallarta officials had every reason to be proud during morning ceremonies. (Facebook/Gobierno de Puerto Vallarta)
Morning ceremonies at the Arcos del Malecón set a formal tone. A civic session recognized people and groups whose steady work stitches the city together. The teachers, volunteer groups and community organizers who offer the kind of quiet service that often slips under the tourist radar.
But the city’s anniversary weekend was far from solemn. The Malecón and Plaza de Armas soon turned into festival mode, as children darted under colorful banners, dancers in bright skirts spun to traditional tunes and regional bands migrated from street to street, giving old songs a celebratory new shine.
Food stalls lined the walkways with the familiar smells of corn and frying dough, families exchanged cake after a large ceremonial slice was shared and elders pointed out rooftops to grandchildren, sketching a living map of belonging. Local artisans displayed hand-painted tiles and woven hats, and impromptu street dancing made it all feel like one long, convivial block party.
If anyone doubted the weekend’s big-ticket attraction, the sky soon made it very clear.
Águilas Aztecas highlight Puerto Vallarta’s anniversary weekend
The highlight came from the Mexican Air Force’s aerobatic demonstration squad, Águilas Aztecas. The squad’s sleek formation flights over Banderas Bay were part precision, part poetry. The Águilas Aztecas turned the bay into a theater, delighting onlookers with tight loops, daring rolls and synchronized maneuvers that drew collective gasps from the beach and the promenade. Pilots who fly regular military missions by day translated that operational skill into a graceful, heart-thumping show, reminding spectators of the discipline behind the spectacle.
For many in the crowd, seeing the pilots in formation was more than a spectacle; it was a reminder of the human skill and duty behind the uniforms. After the show, conversations soon turned to the pilots’ dual roles as public performers in a grand celebration and as everyday aviators who protect and serve.
Protecting Mexico by day, the Águilas Aztecas squadron also found time to help Puerto Vallarta celebrate its milestone weekend. (Ojo de Aguila Photography)
As night fell, a countdown on the Malecón gathered everyone close. Parents raised their children on their shoulders and couples leaned into the moment when the fireworks began.
Launched across Banderas Bay, the display painted the water in mirrored explosions of color. Large shell bursts and delicate fountains cascaded in choreographed waves, reflecting in the bay as if it were applauding.
A story still being written
When the last sparks drifted down, what remained were quieter impressions of vendors packing up, city workers sweeping up and friends lingering for just one more song.
Puerto Vallarta’s anniversary weekend was a civic celebration done in full costume with equal parts ritual and revelry. It was a reminder that the city’s story is constantly being written by the people who live it, by the pilots who soar above it and by the ordinary, luminous moments that happen below.
Charlotte Smith is a writer and journalist based in Mexico. Her work focuses on travel, politics, and community. You can follow along with her travel stories at www.salsaandserendipity.com.
With global supply chains looking shaking after months of strife in the Middle East, could Jalisco offer a solution for manufacturers across the Pacific region? (Foxconn/LinkedIn)
Refineries that rely on oil from the Persian Gulf are running short, and airlines across Asia have begun extended schedule reductions. Some industry analysts expect the supply crisis to persist anywhere from a few months to more than a year.
Conflict in the Middle East has put a strain on global supply chains. (Shutterstock)
That is a serious problem for any supply chain built on long-haul air freight. Electronics from Shenzhen to Detroit, pharmaceutical ingredients from Mumbai to New Jersey, automotive parts from Nagoya to Monterrey. These flows assume that air capacity will always be available to bridge the distance. When that assumption turns false, companies begin asking a different question: how do we get production closer to the customer without causing ourselves excessive costs increases?
That question has been at the center of the nearshoring conversation for years. The Strait of Hormuz crisis simply gives it a sharper sense of timing. Decisions that companies were planning to make over a five year horizon are now being compressed into twelve month action plans.
This is where markets like Guadalajara fall into place. Guadalajara stands out, and the reasons go beyond a favorable map.
Pacific access without the Middle East
Guadalajara, or GDL, has a geographic advantage that often goes underappreciated. The metro area sits roughly five hours by road from Mexico City, the country’s biggest market, and connects by direct highway to three of the busiest crossings into the United States: Laredo and El Paso in Texas, and Tijuana in Baja California. From the same base, the metro area is within few hours of two of Mexico’s most important Pacific container ports, Manzanillo and Lazaro Cardenas. Together they handle most of the country’s Pacific maritime trade. For companies importing components or finished goods from Asia, these ports offer a maritime route into North America that bypasses the Persian Gulf entirely.
GDL’s advantage is not just the ports themselves but the connectivity around them. Highway capacity between Manzanillo and the GDL metro area has been progressively upgraded over the past decade. Ferromex rail service provides intermodal options for higher volume freights, and customs operations at both ports have continued to professionalize. For a manufacturer evaluating how to land Asian materials and ship finished goods into the U.S. market, the GDL-Pacific corridor has become a credible alternative to the Long Beach to rail to Midwest route that has dominated for the past two decades.
Guadalajara has reinvented itself as a modern, well connected alternative to trans-Pacific trade routes. (Carlos O. Flores/Shutterstock)
A real electronics ecosystem
Guadalajara is often described as Mexico’s Silicon Valley. This label might be a bit overused, but the reality is solid. The metro area has hosted contract electronics manufacturing operations for several decades, with established sites for global Electronics Manufacturing Services (EMS) providers and equipment manufacturers serving the consumer electronics, computing, and medical device segments. A very important portion of the design and engineering work, not just the assembly, takes place locally.
This is the kind of cluster that takes decades to build, and it cannot be replicated by a recently inagurated industrial park in a region without the supplier base. When a global brand decides to shift production capacity from Asia to North America, available land is only part of the equation. Suppliers, certified processes, and
engineering talent is what really matters in this situation. GDL answers that question for electronics in a way that few other Mexican markets can.
GDL has evolved to other clusters as well. Aerospace components, medical devices, and hardware have all grown in the region. Each of these segments represents the case for new opportunities. If one or more of your suppliers is already there, your decision becomes easier.
Talent that has been building for a generation
People is the ultimate bet over which industrial real estate sits. A new building only matters if there is a workforce ready to operate it.
Guadalajara has spent decades developing one. The University of Guadalajara, ITESO, and the Tec de Monterrey campus’ together graduate hundreds of engineers each year, and the metro area has had one of the strongest concentrations of bilingual technical talent for a long time. That base is being reinforced by specialized training programs in semiconductor handling, mechatronics, and industrial automation, often delivered in partnership between universities and the manufacturers themselves.
There’s another “breed” of individuals that raises the bar for this ecosystem: mid-career talent. Plant managers, quality engineers, and supply chain professionals with twenty years of experience in regulated manufacturing environments are not abundant in most emerging markets. They are in Guadalajara because the work has been there for a generation. For any company moving operations from Asia, the experience curve is the difference between a launch that hits its production target and one that misses it.
That has practical implications. Industrial absorbtion has been consistent and vacancy in the Guadalajara metro area has tightened over the past several quarters. Institutional developers continue to bet and deliver Class A inventory across submarkets such as El Salto and the Zapopan North corridor. Demand has been outpacing supply in several segments, and pricing reflects that.
For decision makers weighing a move, the message is straightforward. The advantages of Guadalajara are not a theory. The ports, the clusters, the talent are already in place.
Jacobo Guajardo is an industrial real estate specialist with over 33 years of professional experience. He is a Certified Public Accountant from ITESM Campus Monterrey and currently focuses on industrial and corporate real estate.
Outside of the United States, the country most Americans call home is Mexico. The same is true the other way around. The biggest Mexican diaspora lives in the United States. The quicker we take this seriously, the easier it will be to align ourselves economically, security-wise, and, yeah, even politically — at least on the policies that actually touch people’s lives.
Demographics aren’t just numbers on a spreadsheet. They’re the quiet engine reshaping society, the economy, politics and culture. I’ve written about the headline stats before, but let’s go deeper into the dynamics and origins, because this stuff has real teeth: it changes who shows up at the ballot box, who’s building the next factory and whose kids are growing up bilingual at the neighborhood soccer game.
For the United States, the migrant map has flipped completely in the last hundred years. Back in 1920, it looked like one big European family reunion scattered across the country. Today, while those roots remain, the dominant foreign-born population in most states is Mexican. Pew Research Center data make it crystal clear: in 1920, Mexico was tops in just a handful of Southwestern states. By 2022, it was number one in 29 states.
Source: Pew Research Center, “How the origins of America’s immigrants have changed since 1850”, July 2024.
As of 2023, the U.S. is home to 11 million Mexico-born residents — that’s 22% of all immigrants and still the single largest origin group. Add in the U.S.-born kids and grandkids, and you’re looking at roughly 40 million people of Mexican origin, making up 57% of the nation’s 68 million Latinos. Mind-blowing when you sit with it:
One in every 20 people in the entire United States traces their roots to Mexico.
Source: The New York Times, “What’s Going On in This Graph? | U.S. Immigrants by Country.”
And the story is symmetrical. Turn the map around and look at Mexico. I couldn’t find clean municipal-level data from a hundred years ago, but the 2020 picture is unmistakable: across almost the entire country—except the southern border for obvious reasons—the predominant foreign population is American. Between 1.2 and 1.6 million U.S. citizens live in Mexico, accounting for 70% of all registered migrants there. That’s more Americans in one foreign country than anywhere else on earth.
Source: via X, @pCobosAlcala data from CPV 2020 (INEGI)
Economic implications hit different when you see the human side
As a Mexican, I grew up hearing the line “Mexicans are all hard-working people.” The stats turn that into a cold, beautiful fact: Mexican immigrants in the U.S. post a 68% labor-force participation rate — higher than both overall foreign-born and U.S.-born averages. They’re not just showing up; they’re leading in working visas in most states and topping the list for permanent resident visas, ahead of China (Canada sits way back at 43rd, just for context). Mexican-American households and businesses contribute billions to the U.S. GDP each year, while the money they send home stabilizes entire regions of Mexico that might otherwise drive more migration north.
Source: Virtual Capitalist
Remittances tell the tale better than any policy paper. In 2025, Mexico received $61.8 billion in remittances — still the second-highest total ever — even as FDI hit a record $40.871 billion. For three decades running, median income for Hispanic households has climbed 30%. That’s not abstract growth. That’s families on both sides of the border building real wealth together.
Politics is where the numbers get loud
All this mixing has consequences at the ballot box and beyond the public system — consequences nobody talks about enough. Mexican Americans and Latinos are serving in the U.S. Armed Forces at historic rates: Hispanics now make up 20–25%-plus of active-duty personnel in several branches, with Army Reserve units hitting 30%-plus in some years. They’re the fastest-growing demographic in the military. Hispanic veterans grew by 25% from 2008 to 2023, while the overall U.S. veteran population shrank by 20%; today, they’re 8% of all veterans and climbing. On the law-enforcement side, it’s even more striking: over 50% of U.S. Border Patrol agents on the southern border identify as Hispanic/Latino. These aren’t outsiders enforcing rules on outsiders — they’re binational families literally standing guard on the same line their relatives live near.
Voter-wise, the shift is impossible to ignore. Three states are already majority Latino. Two of them, California and Texas, carry the biggest electoral-college weight nationally. Arizona, Nevada and Florida are sprinting in the same direction.
Source: US Census, American Country Survey
Whoever gets this human reality wins elections. You could ask President Trump about it. Just look at the net change in Hispanic voter preferences (lower right corner; last column) from Biden to Harris — those numbers don’t lie.
Looking forward
As we look ahead, the real transformation in North American integration is already written in the daily lives of millions of families who treat both countries as home. With roughly 40 million Mexicans and Mexican-Americans (57% of the nation’s 68 million Latinos) and at the same time, 1.2 to 1.6 million Americans living in Mexico — more U.S. citizens than in any other foreign country — the human bridge between the two nations has never been thicker, creating millions of binational households connected by marriages, births and extended family networks.
The cultural mixing of our countries is an opportunity to make our region richer, more effective, aligned and prosperous. Americans are investing in cities like San Miguel de Allende and Los Cabos. While Mexicans are revamping construction, agriculture and other industries in the U.S.
Latinos, overwhelmingly of Mexican origin, have driven more than half of total U.S. population growth since 2000 through a combination of births and cross-border marriages, turning what once felt like “foreign” into a shared family ritual. This is social and cultural integration at its most visceral: not a policy goal, but a living, breathing reality that makes the region’s future literally family business.
As we talk about “the neighborhood,” “friendshoring,” “Fortress North America” and every other catchy phrase floating around, I just want to state the case plainly: day after day, we’re talking about family issues. Both our countries are home to one another.
Pedro Casas Alatriste is the Executive Vice President and CEO of the American Chamber of Commerce of Mexico (AmCham). Previously, he has been the Director of Research and Public Policy at the US-Mexico Foundation in Washington, D.C. and the Coordinator of International Affairs at the Business Coordinating Council (CCE). He has also served as a consultant to the Inter-American Development Bank. Follow his Substack here.
Mexico City's Paseo de la Reforma is an exciting place in the most ordinary of times, but it has historically carried excitement to a new level as a site for special events, such as the World Cup parade planned for June 13. (@ClaraBrugadaM/X)
Mexico City Mayor Clara Brugada has announced a themed parade along the city’s most famous thoroughfare, Paseo de la Reforma, as part of the events associated with the 2026 FIFA World Cup.
Dubbed the “Great World Cup Parade,” the event is set to take place on June 13, two days after the opening ceremonies, and will showcase traditional expressions of Mexican popular culture while incorporating soccer motifs.
Mayor Brugada and her staff have given high priority to expanding Mexico City’s role as World Cup host to include events — large and small and sometimes spectacular — that exhibit the culture of the nation and its capital. (@ClaraBrugadaM/X)
Attendees can expect music, dance performances and a lively atmosphere charged with World Cup fever.
“The World Cup isn’t just experienced at the stadium,” Brugada said at the event’s official announcement. “Few will be able to get into the stadium, but we, as the city government, are organizing a World Cup for the people.”
The parade will begin at the Diana Cazadora roundabout at 1:00 p.m. and continue along Paseo de la Reforma to the Monumento a la Revolución.
A preview of the event revealed that the parade will celebrate the history of soccer from its origins to its modern-day version. It will also include references to the 1970 and 1986 World Cup editions, both hosted by Mexico.
Soccer legends, including Maradona and Pelé, will be honored at the event with a Day of the Dead offering accompanied by a trajinera (Xochimilco’s traditional boat), giant alebrijes (large Mexican folk art sculptures), 500 catrinas (skulls with colorful decorations) and axolotl figures.
Gigantic balloons inspired by mascots from previous World Cups will be displayed as well, along with the flags of the tournament’s participating countries.
Sonido La Changa, a local band, will play salsas, cumbias and tropical songs from one of the floats, while pre-Columbian dancers and charro troupes parade through the streets.
The parade is only one of over 1,000 official events planned for Mexico City during the World Cup, including 18 “Football Festivals” which will feature large screens for attendees to enjoy the World Cup matches for free, in addition to cultural and musical activities.
“The city’s residents will find more than just soccer,” Brugada said. “There will be concerts, music, dance and a variety of artistic expressions.”
Spanish Vice President Carlos Cuerpo visited Mexico with a contingent of representatives from 66 Spanish companies, all of which are interested in further economic ties with Mexico. (@carlos_cuerpo/X)
Mexico and Spain are aiming to double down — in almost a literal sense — on their already strong economic relationship, having announced Tuesday plans to double bilateral trade, as well as expand mutual investment by 50%, both by 2030.
After meeting in Mexico City, Economy Minister Marcelo Ebrard and Spanish Vice President Carlos Cuerpo announced that the two countries are developing a roadmap to attract investment in strategic sectors with the goal of achieving a 200% increase in business growth in both countries over the next four years.
Spanish Vice President Carlos Cuerpo made it clear during his visit that his country plans to take the lead in the aftermath of the MGA agreement between Mexico and the European Union: “Spain wants to be the gateway to the European Union for Latin American economies.” (@carlos_cuerpo/X)
Cuerpo traveled to Mexico with executives from 66 Spanish companies to discuss the Mexican government’s investment program, which aligns with the country’s overarching Plan México investment strategy.
Amid greater global uncertainty stemming from the rise of protectionism, particularly after the United States imposed far-reaching tariffs on several countries, Mexico is suffering from economic stagnation. This has led the Sheinbaum government to seek foreign investment from a broader range of countries.
Mexico signed a bilateral treaty known as the Modernized Global Agreement (MGA) with the European Union on May 22, which seeks to expand trade relations and diversify exports by eliminating tariffs on 99% of products traded between the two signatories.
Spain was the first EU country to approach Mexico to develop a roadmap for trade following the signing of the MGA.
“Spain wants to be the gateway to the European Union for Latin American economies,” Cuerpo said.
In the first quarter of 2026, Spain was the second-largest source of foreign direct investment in Mexico, at US $3.8 billion. Spanish investments have reached a cumulative total of around $64 billion since 2006, according to data from the Economy Ministry.
“We have bilateral investment of around €100 billion (US $116 billion),” Cuerpo said. “But we are ambitious; we want to strengthen this investment, and we will do so, as the minister (Ebrard) has stated, by implementing the framework, the roadmap we have thanks to the Modernized Global Agreement.”
Around 50% of the 5,400 Spanish companies operating in Mexico plan to increase investments in the economy, according to Cuerpo. The vice president emphasized a focus on strategic sectors, such as energy, finance, infrastructure, water and technology.
In a June 1 letter addressed to U.S. Trade Representative Jamieson Greer and Canadian Trade Minister Dominic LeBlanc, Mexico's Economy Minister Marcelo Ebrard wrote that the Mexican government's public consultations on the USMCA revealed a "positive perception" toward the three-way trade pact "as an instrument that fosters economic stability and provides legal certainty." (Moisés Pablo/Cuartoscuro)
Mexico has formally notified the United States and Canada that it wishes to extend the USMCA free trade pact for an additional 16 years to 2042.
Separately, Canada notified Mexico and the United States on Tuesday that it also wants the trilateral pact to be renewed until 2042.
The USMCA free trade agreement has governed trade between Mexico, the United States and Canada since 2020. (lopezobrador.org.mx)
Mexico and Canada’s notifications to their North American trade partners came as USMCA review talks continue. A formal trilateral review process is set to take place later this year.
In a June 1 letter addressed to U.S. Trade Representative Jamieson Greer and Canadian Trade Minister Dominic LeBlanc, Mexico’s Economy Minister Marcelo Ebrard wrote that the Mexican government’s public consultations on the USMCA revealed a “positive perception” toward the three-way trade pact “as an instrument that fosters economic stability and provides legal certainty, and as an engine for the attraction of foreign direct investment.”
Ebrard also wrote that those consulted were in favor of maintaining the USMCA and continuing to strengthen “regional production chains” and “trilateral cooperation in various fields.”
In addition, “sectors consulted” expressed their opposition to the United States’ Section 232 tariffs on steel and aluminum and spoke about “the importance of strengthening the resilience of supply chains in the face of global and trade changes,” the economy minister told Greer and LeBlanc.
Ebrard also wrote that “almost six years after the USMCA took force, Mexico reaffirms its commitment to the shared prosperity of North America.”
“However, continuing this economic growth will only occur by providing economic certainty to investors who seek our market strength. Consequently, Mexico’s position is to extend the agreement for 16 additional years and to seek agreements that benefit … the three nations,” he wrote.
Ebrard confirmed on Tuesday that the letter had been sent to Greer and LeBlanc.
“Mexico’s intention and position is that the treaty should be extended,” he said at an event with Spanish Minister of Economy, Trade and Enterprise Carlos Cuerpo.
“Keep in mind that the treaty will remain in effect for many more years, but we would like it to be extended to 16 years,” Ebrard said.
Meanwhile, LeBlanc said in a letter to Ebrard and Greer that the USMCA is “highly beneficial to each of our countries and to the integrated North American economy.”
U.S. officials have been less enthusiastic than their Mexican and Canadian counterparts when speaking about the trade agreement that superseded NAFTA on July 1, 2020.
Even if Mexico, the United States and Canada don’t reach an agreement to extend the pact during the upcoming review process, the earliest it could be terminated would be 2036.
According to the Associated Press, LeBlanc has said “he believes the U.S. might want to have the trade agreement subject to annual reviews, and that the Trump administration might seek to cause uncertainty about the trade pact’s permanence.”
Mexico-US trade talks
Ebrard sent his letter to Greer and LeBlanc three days after Mexico and the United States concluded their first formal round of USMCA review talks.
“The technical teams from both countries, working in coordination, made steady progress on an agenda aimed at strengthening the region’s competitiveness. During this first round, priority issues for the regional economy were reviewed: rules of origin for the automotive sector, steel and aluminum, and the region’s economic security,” the Economy Ministry said in a statement.
“Mexico reiterated that the … [USMCA’s] strength lies in the integration of its value chains and in the rules that have made North America the world’s most competitive manufacturing platform,” the ministry said.
The Office of the United States Trade Representative (USTR) issued a similar statement at the conclusion of the bilateral talks in Mexico City.
“The United States concluded discussions with the goals of reducing the trade deficit with Mexico and strengthening American supply chains. During this first round, negotiators discussed priority issues related to automotive rules of origin, steel and aluminum, and economic security,” USTR said.
“The United States and Mexico recognize the importance of advancing cooperation to enhance regulatory compatibility to strengthen sectors, including medical devices, pharmaceuticals, cosmetic products, and others,” Greer’s office said.
Representatives of Mexico and the Economy Ministry hold discussions regarding the review of the USMCA with the U.S. Trade Representative and his team in March 2026. (@m_ebrard/X)
A second round of bilateral discussion is scheduled to take place in Washington, D.C., on June 16 and 17.
Among Mexico’s top goals is to win a reprieve from the tariffs that the United States imposed last year on Mexican steel, aluminum and vehicles. Mexico’s exports to the United States have increased despite the United States’ protectionism, but the U.S. tariffs have been an impediment to the Mexican automotive sector’s export growth.
Still, Mexico’s trade with the United States largely remains tariff-free as most exports comply with USMCA trade rules.
Economy Ministry: USMCA-compliant exports won’t be subject to the United States’ proposed ‘forced labor’ tariffs
The USTR announced on Tuesday that Trade Representative Greer was proposing to impose 10% or 12.5% tariffs on products from 60 countries, including Mexico, that were investigated and determined to have failed to “impose and effectively enforce a prohibition on the importation of goods produced with forced labor.”
That failure, the USTR said, “is unreasonable and burdens or restricts U.S. commerce, and are thus actionable under Section 301(b) of the Trade Act.”
Greer said that “the failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable.”
“This creates a dynamic where American workers are forced to compete globally on an un-level playing field. We will no longer tolerate this disparity. Some trading partners have taken initial steps to prevent the importation of forced labor goods, including through USMCA and commitments in Agreements on Reciprocal Trade. However, each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labor globally,” he said.
The Mexican Economy Ministry (SE) said in a statement on Tuesday that the USTR was proposing a 10% tariff on imports from Mexico and 13 other economies including the European Union, Canada, the United Kingdom and Argentina.
The SE said that it would present arguments against the proposed 10% tariff on Mexican products, and on Wednesday announced that the proposed duty — if enforced — would not apply to USMCA-compliant goods.
“Following consultations with the USTR today, the Ministry of Economy has confirmed that goods that comply with the rules of the United States-Mexico-Canada Agreement (USMCA) would be exempt from the potential application of the proposed tariff on 60 countries as part of an investigation conducted under Section 301,” the ministry said.
“… The proposal does not provide for immediate implementation, but rather initiates a 45-day consultation period,” the SE said.
“In consultations held today, it was clarified that Mexican trade that complies with USMCA rules of origin — approximately 85% of our export volume — is exempt from the measure. Nor would it affect goods covered by [Section] 232 orders (vehicles, steel, and aluminum),” the SE said.
“Regarding the remaining 15 percent of Mexican exports, the Ministry of Economy will hold formal discussions with the USTR over the next 45 days, including a formal round of talks as part of the [USMCA] review to be led on the Mexican side by Minister Marcelo Ebrard, during which information will be presented on Mexico’s commitment and actions against forced labor,” the ministry said.
Our headline finding for May 2026 suggests that the peso was overvalued by around 4% against the dollar. (Mexico News Daily)
THE MND PESO INDEX™
Tracking the exchange rate people actually experience
MND Intelligence · Second edition
Welcome to the second edition of the MND Peso Index™, part of the MND Intelligence™ suite of data products developed by Mexico News Daily.
The MND Peso Index™ is a monthly purchasing power parity measure that assesses whether the Mexican peso is overvalued or undervalued against the US dollar by comparing the prices of a standardized basket of 20 goods and services in Mexico and Dallas, Texas
Our headline finding for May 2026 indicates that the peso was overvalued by just over 4%against the dollar, an increase of more than one percentage point from the 2.83% overvaluation we determined in April.
(Mexico News Daily)
Before we delve into the May result, we would like to further explain the MND Peso Index™ to our readers, dozens of whom commented on the inaugural edition.
The purpose of the MND Peso Index™, the makeup of the basket and more
The purpose of the MND Peso Index™ is to make an assessment — based on actual prices rather than financial market signals — on whether the Mexican peso is overvalued or undervalued against the US dollar.
The MND Peso Index™ is not a “Cost of Living” index that looks at price differences between Mexico and the United States. Its purpose is NOT to assess whether Mexico is a cheap or expensive country to live in relative to the U.S.
Assessing and predicting exchange rates is not an exact science. The monthly assessment the MND Peso Index™ makes on whether the Mexican peso is undervalued or overvalued against the US dollar is intended to give you a real-world perspective on what the exchange rate would be if it reflected the rate at which each currency can buy the same goods and services at the same price in its own country. A simpler way of saying that is this: the implied rate derived from the index basket indicates what the real USD:MXN rate “should be.”
As an independent check on our methodology, we consulted John Doyle, CEO of Monex USA, whose team conducted a review of the MND Peso Index™ and validated our approach. Doyle told us that Monex is forecasting an end-of-year USD:MXN exchange rate of 17.90 — a rate that is close to the implied rates our index basket yielded in both April (17.85) and May (18.02).
The basket of 20 products and services was not formulated to represent a typical shopping list. It was specifically designed to include a wide variety of identical or near-identical goods and services that are available in both the United States and Mexico in order to produce a broadly representative implied exchange rate.
The identical or near-identical products and services included in the basket are available on both sides of the border. Exact comparisons were facilitated by the presence of U.S. chains in Mexico, such as Costco, Walmart and Starbucks.
For the latest MND Peso Index™, we removed two digital subscription services that were included in the April basket: Spotify Premium and Microsoft 365 Personal. Those two items were replaced with a food staple — a 12-piece packet of Great Value flour tortillas — and a physical fitness service: a Planet Fitness membership. In making the changes we took into account feedback we received from readers. We also decided to keep the garden hose in the basket. It was selected as a seasonal item in April, but will remain in the basket as a permanent item for the foreseeable future.
(Mexico News Daily)
The Mexico prices used in the index include IVA (Mexico’s value-added tax), while Dallas prices are pre-tax shelf prices. Dallas was chosen as our U.S. benchmark because it offers a more representative snapshot of everyday pricing in the United States than higher-cost coastal cities. Although our U.S. prices were collected in Dallas, the MND Peso Index™ is ultimately assessing the comparative value of a currency used across the United States — not just in Texas. U.S. sales taxes vary widely by state, city and even product category, meaning readers from Texas, California, Florida or Oregon would each face a different effective price for the same item. Including sales taxes for U.S. products would therefore introduce inconsistency and distortion rather than clarity. Since IVA is inseparable from what consumers pay in Mexico, we opted for shelf prices on both sides of the border — a consistent approach that keeps the index clean, comparable and relevant to U.S. readers regardless of where they are from.
The MND Peso Index™ derives an implied exchange rate for each of the 20 basket items by dividing its Mexico price in pesos by its Dallas price in dollars, yielding the rate at which both prices would be equal. The simple average of those 20 implied rates is the MND Peso Rate. Comparing the MND Peso Rate to the Banxico FIX rate on the date the prices were collected reveals the degree of overvaluation or undervaluation of the Mexican peso relative to the US dollar.
We explained our rationale for developing the MND Peso Index™ in our introductory article last month. Click here to read it.
What did the MND Peso Index™ tell us in May 2026?
In May 2026, the MND Peso Index™ suggests that the USD:MXN exchange rate on the date we collected prices in various Mexican cities and in Dallas, Texas, overvalued the Mexican peso by just over 4%.
The Mexican and Dallas prices were collected on May 26, 2026. The mean implied exchange rate across all 20 items — the MND Peso Rate — came in at 18.02 pesos per dollar, whereas the Banxico FIX rate on May 26 was 17.32 pesos per dollar.
The gap between those two figures indicates that the peso — at a rate of 17.32 to the US dollar — was overvalued by 4.03% in late May 2026.
In other words, the USD:MXN exchange rate — if it reflected the rate at which the peso could buy the basket’s goods and services in Mexico at the same dollar prices as in the United States — would be 18.02.
In the table above, you can see the Mexico and U.S. prices for all 20 goods and services in the basket, the total costs of the two baskets, the implied exchange rate for each item, the MND Peso Rate (ie. the overall implied rate), the Banxico FIX rate on the date prices were collected and the overvaluation/undervaluation assessment for the peso.
Why did the peso’s ‘overvalued’ assessment increase between April and May?
In simple terms, the MND Peso Index™ overvaluation assessment for the Mexican peso was 1.2 percentage points higher in May (4.03%) than in April (2.83%) because the gap between the MND Peso Rate and the official Banxico rate widened to 70 centavos from 49 centavos a month earlier.
Here is a more detailed explanation of what happened:
The MND Peso Rate edged up from 17.85 in April to 18.02 in May, reflecting a shift in the implied exchange rate across the basket of goods and services. At the same time, the Banxico FIX rate slipped slightly — from 17.36 to 17.32 — as the peso marginally strengthened against the dollar. The combination of a higher MND Peso Rate and a lower Banxico rate widened the gap between the two, pushing the overvaluation reading from 2.83% to 4.03%.
We acknowledge that a direct month-on-month comparison is not possible between April and May, as two items from the April basket — Spotify Premium and Microsoft 365 Personal subscriptions — were replaced with Great Value flour tortillas and a Planet Fitness membership. The removal of two items from the basket and the introduction of two others in their place inevitably had some effect on the MND Peso Rate, as different items yield different implied exchange rates.
We read each and every one of the more than 50 comments we received on our MND Peso Index™ article for April. We once again look forward to your feedback.
The MND Peso Index™ result for June will be published in early July.
* Price sources: Mexico prices were collected from the websites and apps of Walmart México, Costco México, AutoZone México, Telmex, Cinépolis, Petco México, and the Mexican outlets of McDonald’s, Starbucks, Netflix and Planet Fitness. Dallas prices were collected from their U.S. equivalents. The Banxico FIX rate of 17.32 published on May 26, 2026 was used as the official exchange rate reference.
Members of Mexico's national team display their numbered jerseys in front of the Aztec Calendar, perhaps the most enduring icon of the nation they will be representing on the pitch starting next week. (Culture Ministry/ Cuartoscuro)
Though Mexico will kick off the 2026 World Cup on home turf, Goldman Sachs says the odds of a historic title run are slim.
In a new report, “The World Cup and the Economy,” the U.S. financial giant gives Mexico just a 0.8% chance of winning the expanded 48-team tournament being co-hosted by Mexico, the United States and Canada.
Win or lose, the 2026 tournament will be remembered as the sixth World Cup that legendary goalkeeper Guillermo “Memo” Ochoa will have appeared in for the Mexican National Team, spanning more than two decades. (Moisés Pablo / Cuartoscuro.com)
Goldman’s model — which weighs historical performance, scoring, momentum, geography and other variables — makes Spain the favorite at about 26%, followed by France at 19% and defending World Cup champion Argentina at 14%. Brazil, the Netherlands and England sit in the next tier.
The Wall Street investment bank is more bullish on Mexico’s early path, projecting Mexico to win all three of its Group A games — including a 2-0 victory over South Africa in the June 11 opener at Estadio Azteca. It also gives head coach Javier Aguirre’s team a 95.6% chance of reaching the new, expanded round of 32, with 68% odds of making the round of 16.
Mexico’s chances then drop to 33.3% to reach the quarterfinals, 10.2% to reach the semifinals and 3.4% to reach the July 19 final in New Jersey.
A separate Opta “supercomputer” is slightly kinder, listing Mexico with a 0.9% chance of winning it all. In thousands of simulations, the computer has Mexico advancing from Group A in 87.2% of cases, and reaching the quarterfinals in 23.5%.
Then again, since the Goldman Sachs research model acts on limited information, it is more of a “fun exercise,” said Jacek Dmochowski, an engineering professor at The City College of New York.
“The information that is going into the model is a tiny sliver of all the information that’s in the possession of the millions of people that have bet into [online] prediction markets,” he said.
Goldman’s simulations point to a Spain–Argentina final, with Spain lifting the trophy.
And though Mexico’s odds of hoisting the hardware are much lower, El Tri’s 0.8% chance is at least ahead of its fellow co-hosts, with the United States at 0.5% and Canada at 0.3%.
Sheinbaum avoided further questions about Sonora Governor Alfonso Durazo and Tamaulipas Governor Américo Villarreal by saying that the two governors — both of whom represent Morena — will have to respond to the L.A. Times report themselves. (Saúl López Escorcia/Presidencia)
Sheinbaum’s mañanera in 60 seconds
🗞️Sheinbaum acknowledges LA Times report: Sheinbaum acknowledged a Los Angeles Times report alleging that the U.S. is investigating Sonora Governor Alfonso Durazo and Tamaulipas Governor Américo Villarreal Anaya for alleged criminal ties, including organized crime and fuel smuggling. Both men have reportedly had their U.S. visas revoked. Sheinbaum said the governors must answer for themselves, then questioned the motives behind the timing and public disclosure of the alleged visa cancellations.
📚 Government says dialogue is open with CNTE: Asked how the government plans to resolve the standoff with the dissident CNTE union, which has set up a protest camp in Mexico City’s historic center, Sheinbaum said teachers have legitimate demands, but indicated that a 100% pay rise is unaffordable. She said the government remains open to dialogue and is working on pension improvement mechanisms.
☮️ “We’re not Díaz Ordaz”: Sheinbaum rules out force against protesting teachers: Sheinbaum firmly ruled out using state force against the protesting teachers, accusing far-right agitators of trying to bait the government into repression ahead of the World Cup. She invoked Gustavo Díaz Ordaz — the president who ordered the 1968 Tlatelolco Massacre days before the Mexico City Olympics — as a symbol of what her government would not become.
🗳️Sheinbaum pushes back on fears Morena will weaponize new electoral interference law: Five days after the Senate approved a reform allowing elections to be nullified on grounds of foreign interference, Sheinbaum rejected opposition claims that Morena could abuse it. She stressed it would be the Federal Electoral Tribunal — not the government — that makes any determination of foreign interference in elections.
Why today’s mañanera matters
Today’s mañanera was held just hours after The Los Angeles Times published a report under the headline “The U.S. is investigating two more Mexican governors for connections to cartels.”
NEW: The U.S. is investigating two more Mexican governors for alleged ties to cartels.
This puts new pressure on President Sheinbaum, who has slammed U.S. probes into sitting Mexican leaders as electoral interference.
The newspaper used the word “more” as U.S. prosecutors have already investigated Sinaloa Governor Rubén Rocha Moya and formally accused him of drug trafficking in league with the “Chapitos” faction of the Sinaloa Cartel. Rocha has taken leave as governor, but denies any wrongdoing, and has not been arrested for the purpose of extradition, as U.S. authorities have requested.
On Wednesday morning, Sheinbaum offered a brief response to the L.A. Times report, but spent significantly more time speaking about other issues, including the ongoing protests by teachers affiliated with the dissident CNTE teachers’ union.
Eight days before the start of the FIFA men’s World Cup, the president ruled out the possibility of using the force of the Mexican state against protesting teachers. That statement was not surprising given Sheinbaum’s previous comments against the use of force against protestors, but the remarks, and her framing of them, were nevertheless significant.
Also of note at today’s mañanera was Sheinbaum’s rejection of claims that the government could use a new electoral law for the benefit of Morena, Mexico’s ruling party.
Sheinbaum acknowledges report stating that US is investigating 2 Morena governors
Sheinbaum noted that The Los Angeles Times published a report that states that the United States is investigating Sonora Governor Alfonso Durazo and Tamaulipas Governor Américo Villarreal Anaya for alleged criminal offenses.
Both men have “been stripped of their U.S. visas amid criminal probes, according to people familiar with the cases,” the Times reported.
People familiar with Durazo’s case said that his visa “was canceled last year, and the U.S. is investigating him for alleged ties to organized crime,” the Times wrote.
“… The investigation into Villarreal, 68, is connected to the smuggling of pirated fuel, a lucrative illegal trade known in Mexico as huachicol, according to people familiar with the case,” the Times reported.
According to the Los Angeles Times, the United States is investigating Sonora Governor Alfonso Durazo, seen here with President Sheinbaum. (Cuartoscuro)
Sheinbaum said that the two governors — both of whom represent Morena — have to respond to the report themselves.
She subsequently questioned the intentions of The Los Angeles Times and its sources.
“What’s the point of stripping the visas and making it public? … To say to Mexicans ‘watch out, watch out, they’re going to take away your visa?'” Sheinbaum asked.
“These things can happen, but what is the interest?” she asked.
The Los Angeles Times said that Villareal “denied any wrongdoing” in a statement, calling the claims against him “false, biased and lacking evidence.” The newspaper said that “Durazo’s office did not respond to a request for comment.”
Paloma Teran, head of the Sonora government’s social communication system, said that the information published by the Times regarding Durazo is “completely false.”
‘We’re not Díaz Ordaz’: Sheinbaum rules out repression against protesting teachers
Sheinbaum said that teachers have “legitimate demands,” but stressed that it is not possible for the government to meet all of them. She has said on repeated occasions that the government can’t meet all of the protesting teachers’ demands — among which is a demand for a 100% pay rise — for budgetary reasons.
On Wednesday, she reiterated that view and highlighted that the government is always “open” to dialogue with teachers.
However, “what a lot of people want is for us to succumb to provocation,” Sheinbaum said, explaining that those people — including individuals she portrayed as “far right” agitators — want the government to use force against protesting teachers, a move that opposition parties, government critics and CNTE-affiliated teachers could use to criticize the president and her administration.
“They want us to resort to repression in the lead-up to the World Cup. We’re not going to succumb to provocation; we’re not Díaz Ordaz,” Sheinbaum said, referring to Gustavo Díaz Ordaz, Mexico’s president when federal forces perpetrated the Tlatelolco Massacre, killing hundreds of students in Mexico City 10 days before the start of the 1968 Mexico City Olympics.
She said that the Interior Ministry and the Education Ministry are working to resolve teachers’ concerns, including by seeking “mechanisms to improve pensions, which is one of the big demands.”
Asked whether she would meet with protesting teachers, many of whom are from the state of Oaxaca, Sheinbaum said she didn’t think it was appropriate to do so. She stressed that Interior Minister Rosa Icela Rodríguez and Education Minister Mario Delgado have all the authority required to reach agreements with teachers.
“Nothing will change if they meet with me. Nothing,” Sheinbaum said.
Sheinbaum rejects claims that government could make improper use of new electoral law
“What our adversaries and critics have been saying is that ‘because we’re authoritarians, we want to use this pretext to annul any election [Morena loses]’. It’s false, completely false,” she said.
“If it is clear that there is interference from abroad, that could be cause for nullification,” Sheinbaum said.
However, she stressed that it will be the Federal Electoral Tribunal — not the government — that determines whether foreign persons, governments or entities have interfered in Mexican elections.
By Mexico News Daily chief staff writer Peter Davies (peter.davies@mexiconewsdaily.com)
MEXICO CITY — The U.S. Embassy in Mexico said Tuesday it has launched a new initiative to help Americans understand the difference between bilateral cooperation and commenting on Mexico’s internal affairs, after Ambassador Ronald Johnson drew a public rebuke from President Claudia Sheinbaum for weighing in on domestic politics.
The program, informally called “Hands Off, But In Touch,” comes with laminated cue cards, approved talking points and a weekly reminder that Mexican affairs are for Mexicans to handle. Embassy staff said the goal is not silence, but “strategic restraint.”
It’s not yet clear if Ambassador Johnson has got the message.
Inside the embassy, diplomats reportedly underwent a short training session on how to express concern without sounding like they had already written a campaign slogan. One official said the hardest part was learning that “respecting sovereignty” is not the same thing as “vaguely acknowledging another country while sending in the CIA.”
A visitor from Ohio said he had assumed embassies mostly handled visas, passports and the occasional diplomatic lunch, not constitutional interpretations. By evening, staff said the new program had made progress, although Johnson was still reviewing whether “stay in your lane” counted as a bilateral issue.
