Mexico ‘loses’ with the arrival of Democrats in the US Congress: Why won't it be favorable?

A political reconfiguration in the United States after the midterm elections that were held on Tuesday, November 3, will have diverse impacts on the economic relationship with Mexico, its main trading partner, according to experts.

George I. González, a US policy analyst, former White House official and founder of the consulting firm Complex, warned that a Democratic victory would not be favorable to Mexico, because its legislators could harden their positions on border security, fighting crime and corruption. "Mexico is in a very precarious situation, because it is not necessarily favorable for the Democrats to return to power."

Additionally, with a mostly Democratic Congress, they will have to decide between promoting new political trials against Donald Trump or concentrating on an economic agenda. “What the Democrat really has to do is focus on Trump's weak spot, which has always been the economy,” he said.

For their part, in an analysis carried out by UBS, they do not consider the midterm elections as a binary event. “While they may influence the medium-term outlook, their outcome is unlikely to displace the main factors currently driving the market: investment in artificial intelligence (AI), economic growth, corporate profits, inflation, and interest rates.”

In this sense, his report details that a scenario of legislative paralysis or narrow majorities will limit drastic turns in fiscal or tax policy, in addition to the Executive Branch maintaining broad powers on tariff issues and foreign policy.

As for the implications for investors, UBS highlights that demand for technological infrastructure remains robust, raising its global AI capex forecasts to $1.0 trillion in 2026 and $1.4 trillion by 2027.

Consequently, regardless of the outcome investors anticipate, the firm suggests avoiding large portfolio positions that rely on a binary political outcome.

Why is the USMCA at risk after the Democratic victory?

An analysis by Integralia states that the USMCA review will run its course regardless of the outcome of the US midterm elections, however, Mexico will face the risk of increased trade, tariff and security pressures, even if the Democrats manage to wrest control of Congress from President Donald Trump.

He explained that a Democratic victory in both legislative chambers could increase internal confrontation in the United States and limit Trump's political margin, but would not necessarily translate into relief for the trade relationship with Mexico.

The agency warned that the US president will retain broad powers to maintain or modify tariffs and demand higher levels of regional content, so the treaty negotiations will maintain their own dynamics.

However, a Republican defeat in states particularly hard-hit by tariffs could generate pressure within the party itself to moderate some trade measures.

For its part, a Banamex report warns that the elections could reduce President Donald Trump's room for manoeuvre to boost his economic and commercial agenda during the last two years of his term.

The financial institution anticipated that the deterioration in Trump's popularity would be one of the main factors behind the possible electoral turnaround. Its net approval went from -9.9 percentage points at the beginning of 2026 to -20 points prior to the elections.

In this sense, Banamex attributed the wear and tear to discontent over the increase in the cost of living, tariff policy and the war in the Middle East, factors that have eroded support for the Republican administration.