José Medina Mora, who leads the Business Coordinating Council, says the biggest headwinds for companies are increasingly inside Mexico, not across the border. He cites criminal activity, anxiety over a judicial overhaul and tougher tax actions as heavier drags than US tariffs or uncertainty about trade ties.
He offered a stark snapshot of how extortion has morphed: "In some regions of the country, extortion has evolved to take over the distribution of goods." He flagged Sonora on the border, Colima on the Pacific, and the avocado engine of Michoacán as flashpoints where criminal groups have wedged themselves into supply chains.
Medina Mora described a shift from classic protection payments to gangs commandeering deliveries, positioning themselves between sellers and buyers. He said vendors of construction supplies are compelled to hand over sales to criminal intermediaries, who then flip the goods at a 20% premium. He added that beer, shrimp and avocados face similar practices.
The scale is broad: he said roughly one in two companies suffered a crime over the past year. Merchandise theft was most common, with extortion next in line, then vehicle theft and cyber intrusions. Official data show reported extortion climbed 32% from 2020 to last year.
What business leaders say is holding back investment is worth listening to. Market Briefs covers that sentiment free every weekday.
President Claudia Sheinbaum took office in Oct. 2024. Entering year three of her term, Sheinbaum points to a marquee decline in homicides, saying the rate is down by about half since 2020 as part of a strategy focused on intelligence gathering. On extortion, her administration reports more than 2,000 arrests since launching a plan last year that also created a national reporting hotline and pledged more specialized investigators. Medina Mora credits improvements in some crime categories but stresses the distance left to go: "We believe there's been progress, but we're far from the Mexico of security, justice and peace that we want."
He also pointed to Mexico's two-year-old judicial reform as a headache for local firms. Under the constitutional overhaul, judges are no longer appointed but chosen at the ballot box, extending even to the Supreme Court. He noted that while overseas investors once sounded alarms, many now see an imperfect system without an obvious tilt against foreign companies.
Tax fights are another speed bump. A CCE review of investment projects that stalled in the first quarter found recurring conflicts with the SAT tax authority. Firms operating close to the border cited cases where they were taxed twice, and elsewhere businesses were hit with backdated assessments.
Medina Mora said the SAT's push to restrict deductions is squeezing businesses just as conditions have softened, citing higher energy costs as one example. He argued the tax data tell the story: income tax receipts are dropping even as value-added tax revenue rises, which he reads as steady consumption alongside thinner corporate margins.
"The drop in income tax revenue reflects the fact that companies are earning lower profits," he said. He noted that legislation put forward by the government and now before Congress would further narrow income-tax deductions, prompting pushback from segments of the private sector.
Beyond Mexico's domestic hurdles, Medina Mora, founder and chairman of IT firm CompuSoluciones, urged action on US Section 232 duties. He said the duties are weighing on Mexico's auto, steel and aluminum industries, contending that Mexican automakers are treated less favorably than their counterparts from Japan, South Korea and the European Union, and that Mexican steel faces a disadvantage against Vietnamese shipments in the US. "We have kept pressing for those tariffs to come down, and I would say the winds in Washington are now favorable toward Mexico for a negotiation that lowers them," he said.
On the broader USMCA pact that underpins tariff-free access for most Mexican goods, his message is to wait it out: "We have to be patient. We're in no hurry," he said, adding, "There will probably need to be a change in the US presidency for the agreement to be renewed." For investors with exposure to Mexico through consumer, industrials or infrastructure, the near-term story is more about security, courts and tax policy than headline tariff drama. Crime adds costs, court changes cloud predictability, and tax disputes can stall projects. The trade backdrop still matters, but right now the weather that counts most is at home.
Rule of law concerns deter capital more reliably than tax rates. Join Market Briefs free and follow it.
