Mexico's Covid Codependency

U.S. stimulus flows to Mexico in the form of remittances and increased export demand

- Max de Haldevang

Trucks line up at the U.S. border crossing in Nuevo Laredo, Mexico

Andrés Manuel López Obrador came to power promising to make Mexico’s economy less dependent on its giant northern neighbor. His pandemic policies are having the opposite effect.

The Mexican president has run one of the world’s most austere budgets through the Covid-19 crisis, declining to borrow extra money as the economy slumped. The stimulus that prevented an even deeper recession, and is set to drive a rebound this year, is coming from the U.S. instead.

Mexico has benefited in two pivotal ways from U.S. pandemic spending, which is set to exceed $5 trillion with the Biden administration’s bill. Remittances surged to an all-time high as Mexicans authorized to work in the U.S. received stimulus checks and sent some of the money home. Exports also hit a record, because Mexican factories make a lot of the things Americans wanted to buy in the era of lockdowns and working from home—such as televisions and computer gear.