Economic Challenges Facing Nuevo León, Chihuahua, and Coahuila
The Mexican states of Nuevo León, Chihuahua, and Coahuila, often referred to as the motor of Mexico’s national economy, are experiencing significant economic challenges. The regions have reported declines in their GDP: -1.4% for Nuevo León, -0.1% for Chihuahua, and -3.0% for Coahuila, according to data from the National Institute of Statistics and Geography (INEGI). Other states like Durango, Guanajuato, Querétaro, and the State of Mexico have also faced economic downturns over the past year.
Key Economic Issues
- Declining Remittances: In 2025, remittances from the U.S. to Mexico dropped to under $62 billion, a decrease from $65 billion in 2024. This decline is particularly painful given the devaluation of the U.S. dollar.
- Weakening Sectors in the U.S. Economy: The sectors that heavily involve Mexicans, such as transportation equipment manufacturing, chemical products, and machinery, are not growing in the U.S. economy.
- Fear of ICE Enforcement: The threat of Immigration and Customs Enforcement (ICE) deportations has led to a decrease in labor force participation and business activities.
- Automotive Exports Decline: While overall exports grew in 2025, automotive exports fell by 4.2%. This trend is expected to worsen due to the trade policies of the U.S.
Trade Policies and Their Impact
Former U.S. Trade Representative Robert Lighthizer, known for his tough negotiation style, played a crucial role in shaping the current USMCA agreement between Mexico, the U.S., and Canada. Lighthizer accused Mexican manufacturers of misrepresenting the origin of parts in their automotive production, leading to stricter rules under the T-MEC. Additionally, new tariffs not part of the negotiations have been imposed.
President Sheinbaum’s Response
In response to these challenges, Mexico City’s President Claudia Sheinbaum announced a new plan titled “Sustainable Development with Well-being.” Although the plan is still in its early stages, it has been welcomed as a positive step by both the government and private sector.
Key Questions and Answers
- What is causing the economic downturn in northern Mexico? The decline stems from various factors, including reduced remittances, weakening sectors in the U.S. economy, fear of ICE enforcement, and a drop in automotive exports.
- Who is Robert Lighthizer and what role did he play? Robert Lighthizer was the U.S. Trade Representative during the previous administration, known for his tough negotiation style. He played a significant role in shaping the USMCA agreement, which has led to stricter rules and new tariffs affecting Mexican manufacturers.
- What is President Sheinbaum’s plan to address these challenges? President Sheinbaum announced a new plan called “Sustainable Development with Well-being.” The plan aims to tackle the economic issues faced by northern Mexico, though it is still being developed and refined with input from the private sector.
