MND Staff, Author at Mexico News Daily https://mexiconewsdaily.com/author/pdavies/ Mexico's English-language news Fri, 03 Jan 2025 22:12:06 +0000 en-US hourly 1 https://wordpress.org/?v=6.7.1 https://mexiconewsdaily.com/wp-content/uploads/2022/10/cropped-Favicon-MND-32x32.jpg MND Staff, Author at Mexico News Daily https://mexiconewsdaily.com/author/pdavies/ 32 32 Mexico could once again receive non-Mexican deportees from US, Sheinbaum suggests: Friday’s mañanera recapped https://mexiconewsdaily.com/politics/mexico-accept-non-mexican-deportees-u-s-sheinbaum-friday-mananera-recap/ https://mexiconewsdaily.com/politics/mexico-accept-non-mexican-deportees-u-s-sheinbaum-friday-mananera-recap/#respond Fri, 03 Jan 2025 22:10:00 +0000 https://mexiconewsdaily.com/?p=426906 "We're going to ask the United States to, as far as is possible, send migrants who aren't from Mexico to their countries of origin," President Sheinbaum said.

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Possible mass deportations of immigrants living in the United States and tariffs implemented by the Mexican government this week were among the topics President Claudia Sheinbaum spoke about at her Friday morning press conference.

She also announced that a former governor would take over the leadership of one of Mexico’s energy agencies.

Mexico could receive non-Mexican deportees, Sheinbaum says

Sheinbaum reiterated that Mexico “is not in favor” of the mass deportations United States President-elect Donald Trump has pledged to undertake during his second stint in the White House.

“But if they happen … we’re going to receive the Mexicans that arrive in our country, and we’re going to ask the United States to, as far as is possible, send migrants who aren’t from Mexico to their countries of origin. And if they can’t, we could collaborate through different mechanisms,” she said.

Sheinbaum said last month that Mexico has an agreement with the Biden administration under which the United States sends deportees “of many nationalities” on direct flights to their countries of origin. She said that her government hoped to reach a deal with the incoming Trump administration so that most non-Mexican deportees continue to be sent to their countries of origin.

If Mexico were to agree to receive non-Mexican deportees, the federal government could limit acceptance “to certain nationalities or request compensation from the U.S. to move the deportees from Mexico to their home countries,” The Associated Press reported.

Migrants being transported from Reynosa to interior of Mexico by immigration authorities
Mexican authorities previously said they would push for Trump to return migrants directly to their country of origin, though Mexico has accepted non-Mexican deportees from Venezuela, Cuba and other countries in the past. Shown: Officials in Reynosa transport recently arrived U.S. deportees. (CBP/Twitter)

AP noted that “Mexico, like any other country, is not obligated to accept non-Mexican migrants, but it has agreed to do so in the recent past, especially from countries like Cuba and Venezuela.”

Those countries, the news agency added, “often refuse deportation flights from the United States, but may accept them from Mexico.”

Sheinbaum said Friday “there will be a time to speak with the United States government if these [proposed] deportations really happen.”

“But we will receive … [deportees] here and we will receive them properly. We have a plan that I said yesterday we would present in due course,” she said.

Sheinbaum explains objective of new tariffs 

Asked about the new tariffs on products imported via e-commerce sites, Sheinbaum said they are aimed at individuals or companies purchasing large quantities of goods to sell in Mexico.

“There are these [online] platforms where one can request any product. One thing is the individual arrival [to Mexico] of one piece, but what we detected is that in reality [the e-commerce sites] were being used to bring [products into Mexico] and then sell them in Mexico,” she said.

“And that requires the payment of taxes,” Sheinbaum said, apparently also referring to a new rule requiring foreign e-commerce sites to pay Mexico’s value-added tax.

Amazon delivery person
E-commerce companies are the target of new taxes and import duties, which went into effect Jan. 1. (File photo)

“One person, an individual, requesting a piece is not the same thing as [many] pieces being brought in to be sold, right?” Sheinbaum added.

She said that many Mexican small businesses have closed down due to reasons that include the entry of products from countries with which Mexico doesn’t have trade agreements, such as China. Some of those products enter Mexico to be sold “widely” after they were purchased on e-commerce sites (such as Temu and Shein), Sheinbaum said.

Disincentivizing that practice is the objective of the new tariffs, she said.

Former Veracruz governor joins federal government 

Sheinbaum announced that former Veracruz Governor Cuitláhuac García will take on the role of director of the National Center for Natural Gas Control (Cenagas).

García, who completed his six-year term as governor of Veracruz last November, will start in the position next Monday, the president said.

“Few people know that Cuitláhuac is a mechanical and electrical engineer who studied at the Veracruzana University. He’s a very good engineer,” Sheinbaum said.

Former Veracruz Governor Cuitláhuac García and former President Andrés Manuel López Obrador
Cuitláhuac García wrapped up his term as governor of Veracruz in November. (Cuitláhuac García/Facebook)

“He was studying his doctorate abroad and in 2006, if I’m not mistaken, or 2012, he took the decision to leave the doctorate to come to fight for the transformation of Mexico,” she said of the former Morena party governor.

Sheinbaum described García as an “honest” man “with a lot of technical knowledge” about energy.

“He will help us coordinate all the work at Cenagas related to the production, use and distribution of natural gas,” she said.

By Mexico News Daily chief staff writer Peter Davies (peter.davies@mexiconewsdaily.com)

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New e-commerce tariffs take effect, with Chinese imports paying some of the highest rates https://mexiconewsdaily.com/business/e-commerce-tariffs-chinese-imports-pay/ https://mexiconewsdaily.com/business/e-commerce-tariffs-chinese-imports-pay/#respond Fri, 03 Jan 2025 19:28:45 +0000 https://mexiconewsdaily.com/?p=426819 On top of having to pay a new tax, foreign e-commerce faces new tariffs, with exceptions for Mexico's trade agreement partners.

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New tariffs on products imported to Mexico via e-commerce sites such as Amazon and Temu and international courier companies took effect on Jan. 1.

Ranging from 17% to 19%, the tariffs entered into force the same day a new rule took effect requiring foreign e-commerce companies to pay Mexico’s 16% value-added tax (IVA) on products they export to and sell in Mexico.

An Amazon e-commerce warehouse filled with shelves and shelves of cardboard boxes
On top of recent tax increases, e-commerce sites like Amazon, Shein and Temu will also be subject to importation tariffs. (Álvaro Ibáñez/Flickr)

Federal tax agency SAT said in a statement that the tariffs were being implemented to “continue strengthening the fight against abusive practices” of foreign companies that import products to Mexico.

SAT also said that surveillance of goods entering Mexico from Asia will be strengthened, which could lengthen delivery times.

Outlined in the General Rules of Foreign Trade for 2025 document that was published in the federal government’s official gazette earlier this week, the tariffs are as follows:

  • All products imported via e-commerce sites and courier companies from countries with which Mexico doesn’t have a trade agreement are subject to a uniform 19% tariff. Mexico doesn’t have a trade pact with China, where Temu, Shein, AliExpress and other e-commerce companies are based.
  • A 19% tariff also applies to goods valued at more than US $1 that are imported via e-commerce sites and courier companies from countries with which Mexico does have a trade agreement, with a couple major exceptions: Goods imported from the United States and Canada are exempt.
  • Products entering Mexico via e-commerce sites and courier companies from the United States and Canada are subject to a 17% tariff if their value is greater than US $50 but doesn’t exceed $117. Goods from the U.S. and Canada — Mexico’s USMCA trade partners — are not subject to any tariff if their value doesn’t exceed $50.
  • Products entering Mexico via e-commerce sites and courier companies from the United States and Canada are subject to a 19% tariff if their value is between US $118 and $2,500.

Previously, countries were not required to pay duties on goods of those values, according to a SAT spokesperson quoted by the Reuters news agency.

Media organization Merca 2.0 noted that “a decorative LED desk lamp purchased on Amazon and shipped [to Mexico] from China with a base price of $700 MXN would incur a 19% tariff equivalent to $133 MXN, bringing the cost to $833 MXN.”

The price of the lamp would be even higher if Amazon passed on the 16% IVA to the customer.

Mexican women, children and a man gather around a market stand selling clothing from the Chinese e-commerce site Shein
Imports from e-commerce companies like Chinese fast fashion retailer Shein are often cheaper than Mexican-made products, threatening domestic industries. (Mictlancihuatl/CC BY-SA 4.0)

The implementation of the new tariffs and introduction of the new IVA rule come as Mexico is seeking to reduce its reliance on imports from China and other Asian countries. Chinese e-commerce sites (and brick-and-mortar stores in Mexico) sell a wide range of Chinese goods at prices that are significantly lower than those made in Mexico, raising concerns about the ongoing viability of various Mexican industries.

Last month, the federal government announced new tariffs on clothes and textiles imported from countries with which Mexico doesn’t have a free trade agreement. The stated aim was to protect the Mexican textile/clothing industry, which the Mexican government says is losing jobs due to, in large part, unfair competition from underpriced Chinese imports.

The El País newspaper reported that the objective of the 35% tariffs on imported clothes and textiles is to “kill three birds with one stone”: to encourage production in the Mexican textile industry; to increase tax collection in a country that has one of the lowest collection rates in the OECD; and to send a “conciliatory message” to the incoming U.S. government led by Donald Trump.

Mexican authorities have also raided stores in Mexico to seize counterfeit Chinese goods as well as products for which applicable import fees were not paid.

Obliging foreign e-commerce companies to pay IVA and tariffs on products they import to Mexico will create a more level playing field between foreign and Mexican businesses — and thus should make locally made goods more competitive.

With reports from Reuters, El País and Merca 2.0 

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Sheinbaum disputes NYT fentanyl report: Thursday’s mañanera recapped https://mexiconewsdaily.com/politics/sheinbaum-fentanyl-mexico/ https://mexiconewsdaily.com/politics/sheinbaum-fentanyl-mexico/#comments Thu, 02 Jan 2025 23:59:47 +0000 https://mexiconewsdaily.com/?p=426569 Sheinbaum's Thursday conference questioned a New York Times article claiming that fentanyl cookers in Sinaloa had developed immunity to the drug's deadly vapors.

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The US dollar-Mexican peso exchange rate. The size of the Mexican economy. The federal government’s plan to receive deportees from the United States. A recent New York Times’ dispatch from “inside a Sinaloa Cartel fentanyl lab.”

They were among the topics President Claudia Sheinbaum spoke about at her first morning press conference of 2025, held at the National Palace this Thursday Jan. 2.

Photo of Donald Trump in a suit and tie standing in front of a projection screen of a rippling U.S. flag. His lips are pursed and he appears to be listening to someone speaking.
U.S. President-elect Donald Trump. (Anna Moneymaker/Shutterstock)

Sheinbaum predicts exchange rate will stabilize after Trump takes office 

Sheinbaum noted that the peso has depreciated against the US dollar since she was sworn in as president on Oct. 1.

“Among other things, it’s due to uncertainty in the United States and the changes in the [interest] rate of the Fed,” she said.

“We expect that once President Trump takes office, we’ll enter a period of stabilization,” Sheinbaum said.

The president presented data that showed that the peso depreciated less against the US dollar in the final three months of 2024 than several other currencies including the Japanese yen, the euro, the British pound and the Canadian dollar.

The data showed that the peso depreciated 5.8% against the greenback in the period, while the yen fell 9.5%, the euro declined 7.5%, the pound dropped 6.8% and the Canadian dollar dipped 6.3%.

A man and a woman looking at a sign in a bank window listing the rate of the Mexican peso against the US dollar, the euro, the British pound sterling, the Canadian dollar and the Japanese yen.
Pedestrians eyeing Mexico’s currency exchange rate on Dec. 27 in Mexico City. President Sheinbaum insisted that Mexico is doing better against the U.S. dollar than several other world currencies. (Andrea Murcia Monsivais/Cuartoscuro)

“Look at the depreciation of other currencies so that you don’t say it’s a Mexico issue. It’s an international issue,” Sheinbaum said.

The peso is “among the currencies that had the lowest depreciation,” she added.

The Bank of Mexico’s closing USD:MXN rate on Thursday was just under 20.62.

Mexico ‘still the 12th largest economy in the world’

Sheinbaum also presented 2023 World Bank data that showed that Mexico was the 12th largest economy in the world, behind the United States, China, Germany, Japan, India, the United Kingdom, France, Italy, Brazil, Canada and Russia.

“We’re still the 12th largest economy in the world, … above Spain, South Korea, Australia, Indonesia, Netherlands, Turkey, Saudi Arabia and Switzerland,” she said, mentioning the countries ranked 13th to 20th based on the size of their economy.

The data Sheinbaum presented showed that Mexico had a GDP of US $1.789 trillion in 2023, equivalent to 1.7% of global GDP.

Plan to receive deportees during second Trump administration is ‘ready,’ says Sheinbaum 

Asked about the progress that has been made in terms of preparing for the possible mass deportation of Mexicans from the United States during Donald Trump’s second term as U.S. president, Sheinbaum said that the government already has a “very elaborate plan.”

“… We already have it ready,” she stressed, adding that the government is waiting to see what happens vis-à-vis deportations before presenting the plan.

A migrant worker holding a wholesale box of strawberries as they walk through a field of the plants
Migrant worker in California picking strawberries. (Tim Mossholder/Unsplash)

“But everything is prepared,” Sheinbaum said, adding that states all over the country will have a role in the plan’s execution.

The government is not just working with the border states but with entities all over the republic, she said.

“If a compatriot arrives to Mexico at the border, it’s very probable that he or she will want to go to their place of origin,” she said.

Government seeks to debunk NYT fentanyl report 

Three days after Sheinbaum declared that a New York Times report about fentanyl production in Sinaloa “is not very credible,” no fewer than three other government officials sought to explain why the report is not grounded in truth.

A central focus of the officials — the director of health agency IMSS-Bienestar, the director of health regulator Cofepris and a precursor chemicals specialist with the Mexican Navy — was the Times’ suggestion that fentanyl cooks could develop a tolerance to the synthetic opioid.

Mexico's President Claudia Sheinbaum at a press conference looking at a projection of photos from a recent New York Times article on a Sinaloa fentanyl lab.
Sheinbaum put up photos from a recent New York Times article about a Sinaloa fentanyl lab during her press conference Thursday and focused in on why the article’s claim that fentanyl cooks were developing immunity to the drug’s deadly vapors was false. (Daniel Augusto/Cuartoscuro)

Referring to a conversation with two alleged fentanyl cooks at a Sinaloa Cartel lab in Culiacán, reporters for the Times, who said they wore “gas masks and hazmat suits” to the lab, wrote:

“While one sniff of the toxic chemicals could kill us, they explained, they had built up a tolerance to the lethal drug.”

Cofepris director Armida Zúñiga Estrada told reporters on Thursday that “there is no evidence of tolerance of this substance.”

Similarly, navy chemicals analyst Juana Peñaloza Ibarra said “there is no scientific evidence that supports the idea” that a person can build up a “tolerance to the lethal drug.”

For his part, IMSS-Bienestar director Alejandro Svarch Pérez said that if cooks shown in the Times’ report had really been producing fentanyl, they would have fallen down unconscious in 30 seconds due to “the vapors” emitted from “the synthesis of fentanyl.”

The cooks were wearing face masks but were not using any professional protective equipment.

A woman in military fatigues speaks at Mexico's presidential podium during a presidential press conference while President Claudia Sheinbaum confers in the background onstage with Mexican Social Security director Alejandro Svarch.
President Sheinbaum, background right, confers with Mexican Social Security director Alejandro Svarch as Juana Peñaloza, an expert in chemical precursors, speaks to reporters. (Daniel Augusto/Cuartoscuro)

To produce fentanyl, “a laboratory where the conditions of exposure can be controlled is required,” Svarch said, adding that “specialized equipment” and “professional ventilation systems” are also needed.

Fentanyl can’t be made in “a domestic kitchen, as the report shows,” he said.

“It is not possible to make fentanyl in the way referred to in the article,” Svarch added.

Sheinbaum said on Monday that fentanyl is not produced in the way the Times’ photographs demonstrate, and suggested that the cooks were actually making methamphetamine.

On Thursday she said that “if there was [such a thing as] tolerance to the lethal drug, there wouldn’t be the deaths due to fentanyl that there [currently] are in the United States.”

In pointing out alleged falsehoods in The New York Times report, Sheinbaum said that the government was “defending the right to information, to veracity” and committed her administration to “denouncing” inaccurate reporting in the future.

After the president questioned the credibility of the Times’ article earlier this week, the newspaper said it was “completely confident” in its reporting on fentanyl production in Mexico.

Sheinbaum’s rejection of the newspaper’s reporting continues a practice of her predecessor, Andrés Manuel López Obrador, who was an outspoken critic of the Mexican and international press during his presidency.

Whether the Times’ Dec. 29 report really shows fentanyl cooks in a fentanyl lab or not, the fact remains that large quantities of the synthetic opioid are made in Mexico (using precursor chemicals from China) and illegally shipped to the United States.

The Mexican government’s willingness and capacity (or lack thereof) to reduce the flow of fentanyl — and migrants — to the United States looks set to be a defining factor in the health of the Sheinbaum administration’s relationship with the U.S. government led by Trump. In November, the president-elect pledged to impose a 25% tariff on all Mexican and Canadian exports on the first day of his second term due to what he called the “long simmering problem” of drugs and migrants illegally entering the U.S. from the country’s southern and northern neighbors.

By Mexico News Daily chief staff writer Peter Davies (peter.davies@mexiconewsdaily.com)

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Expect higher prices on gas, alcohol, snacks and more, thanks to the IEPS https://mexiconewsdaily.com/news/ieps-increase-mexico/ https://mexiconewsdaily.com/news/ieps-increase-mexico/#comments Thu, 02 Jan 2025 21:10:14 +0000 https://mexiconewsdaily.com/?p=426463 The IEPS, an excise tax Mexico adjusts every January 1, affects prices on everything from gas and diesel to cigarettes and junk food.

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Consumers in Mexico should expect to pay higher prices for gasoline, alcoholic beverages cigarettes and soft drinks in 2025 due to a 4.5% increase in the IEPS excise tax.

In accordance with Mexican law, the increase in the Special Tax on Products and Services (IEPS) — which is levied at different rates depending on the good or service — is in line with Mexico’s headline inflation rate at the end of 2024.

Tomatoes for sale at a market
The IEPS rate is set at the beginning each year and must, by law, be in line with Mexico’s headline inflation rate at the end of the previous year. (Cuartoscuro)

The IEPS brought in revenue of more than 570 billion pesos (US $27.6 billion) in the first 11 months of last year, making it the third largest generator of tax income for the federal government after income tax and Mexico’s value-added tax.

Here is a summary of how the 4.5% increase to the IEPS rate will lift prices for certain products this year.

Gasoline and diesel 

  • The IEPS on magna, or regular, gasoline is now 28 centavos higher at 6.45 pesos per liter.
  • The IEPS on premium gasoline is now 24 centavos higher at 5.45 pesos per liter.
  • The IEPS on diesel is now 30 centavos higher at 7.09 pesos per liter.

* NOTE: The federal government sometimes offers fuel subsidies that reduce the price motorists pay when filling up.

During the first 10 days of January, the IEPS on regular gasoline will be 23 centavos lower at 6.22 pesos per liter thanks to a 3.57% government subsidy.

Convenience store refrigerator in Mexico filled with bottles of Corona and Leon brand beers.
The 4.5% increase in the IEPS in 2025 also means alcoholic beverages will cost slightly more. (Graciela López/Cuartoscuro)

During the same period, the IEPS on diesel will be 3 centavos lower at 7.06 pesos per liter thanks to a 0.37% government subsidy. There will be no subsidy for premium fuel during the first 10 days of 2025.

So, how much will you pay when filling up your vehicle in early 2025?

According to fuel market data cited by the El País newspaper, the average price in Mexico for one liter of fuel on Jan. 1 was as follows:

  • Regular gasoline: 24.04 pesos per liter (US $1.16 at the current exchange rate).
  • Premium gasoline: 25.38 pesos per liter (US $1.23).
  • Diesel: 25.73 pesos per liter (US $1.25).

Alcoholic beverages 

The IEPS rate for alcoholic beverages varies depending on the alcohol content, or alcohol by volume (ABV).

The rate for beverages with an ABV up to 14% (beer and many wines) is lower than those for stronger beverages such as spirits.

Consumers should expect to pay slightly higher prices for alcohol as a result of the 4.5% increase to the IEPS.

Soda and other ‘flavored beverages’ 

The new IEPS for refrescos (soda/soft drinks) and other bebidas saborizadas (flavored beverages) is 1.64 pesos per liter, an increase of 7 centavos compared to 2024.

Man wearing a suit and tie, a straw fedora hat and sunglasses and smoking a cigar on the streets of Mexico City
This Mexico City man’s smoking habit will cost him a bit more in 2025, but not much: a pack of 20 cigarettes will cost only about 1 peso more this year. (Edgar Negrete Lira/Cuartoscuro)

Cigarettes 

In 2025, smokers will pay an IEPS of 64 centavos per cigarette, an increase of almost 3 centavos compared to 2024. The IEPS on a pack of 20 cigarettes is therefore almost 13 pesos, nearly 1 peso higher than in 2024.

Processed food 

The IEPS also applies to processed foods such as potato chips, chocolate, peanut butter and candy. Such products will consequently be slightly more expensive in 2025.

Even before the higher IEPS rate took effect, Mexico’s largest baker, Grupo Bimbo, increased the price of some of its products by 1 peso. Those increases took effect Dec. 23, according to the newspaper La Jornada.

Services 

The IEPS is also levied on certain services including mediation, brokerage and the distribution of alcohol, cigarettes and junk food.

Therefore the price of such services will likely increase in 2025.

The post-holiday financial blues  

While many Mexicans receive an aguinaldo payment (an annual entitlement for formal sector workers) in December, financial stress is common in the first month of the year

Higher-than-usual spending over the holiday period as well as price hikes that take effect in January leave many Mexicans struggling to make ends meet in January. The phenomenon is known as “La cuesta de enero,” which could be translated to English as the uphill struggle of January.

In addition to the increase in the IEPS on Jan. 1 2025, “tax cuts on food and energy will disappear” and “there will be new taxes on electronic cigarettes,” La Jornada reported.

In addition “large telecommunications companies will increase their rates,” the newspaper said, while products purchased on foreign e-commerce sites could become more expensive as companies such as Amazon and Temu will now have to pay Mexico’s 16% value-added tax on products they export to and sell in Mexico.

Thankfully, many workers will get a pay rise this year as Mexico’s minimum wage increased 12% on Jan. 1.

The cost of living in Mexico has risen significantly in recent years due to inflation, which peaked at 8.7% in August and September 2022.

With reports from El País, El Economista and La Jornada

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Two Mexicans among the injured in New Orleans New Year’s attack https://mexiconewsdaily.com/news/two-mexicans-injured-new-orleans-new-years-attack/ https://mexiconewsdaily.com/news/two-mexicans-injured-new-orleans-new-years-attack/#respond Thu, 02 Jan 2025 18:36:20 +0000 https://mexiconewsdaily.com/?p=426437 The New Orleans Mexican Consulate is providing assistance and keeping in contact with the families of the Mexican victims.

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The Mexican government said Wednesday that two Mexicans were injured in the New Year’s Day truck attack in New Orleans that claimed the lives of 15 people.

In a post to social media on Wednesday night, the Ministry of Foreign Affairs (SRE) said that United States authorities had confirmed that “two Mexican people were affected by the terrible attack in the early hours of today in New Orleans.”

The ministry said that both Mexican victims were reported in “stable” condition. It didn’t identify the victims or say what injuries they sustained.

President Claudia Sheinbaum said Thursday that the two Mexicans were visiting New Orleans.

The SRE said that the Mexican Consulate in New Orleans is in contact with the families of the Mexican victims and is providing them with the assistance they require.

The two Mexicans are among more than 30 people who were injured when a man drove a pickup truck into a crowd on New Orleans’ famous Bourbon Street in the city’s French Quarter.

Among those killed were “an 18-year-old girl dreaming of becoming a nurse, a single mother, a father of two and a former Princeton football star,” according to the Associated Press.

The suspect, identified as 42-year-old U.S. citizen Shamsud-Din Bahar Jabbar of Texas, was killed in a shootout with police.

U.S. President Joe Biden said Wednesday that the FBI had informed him that “mere hours before the attack,” the suspect “posted videos on social media indicating that he was inspired by ISIS,” the Islamic State terrorist organization.

The FBI said in a statement that “an ISIS flag was located in the vehicle” — a Ford pickup truck.

“The FBI is working to determine the subject’s potential associations and affiliations with terrorist organizations. Weapons and a potential IED [improvised explosive device] were located in the subject’s vehicle,” the statement said.

Sheinbaum condemned the attack in a social media post on Wednesday and at her morning press conference on Thursday.

“Our solidarity with the families of the victims and with the people of the United States,” she said Wednesday.

With reports from El Universal and Reforma  

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New tax rule for foreign e-commerce sites selling in Mexico takes effect https://mexiconewsdaily.com/business/e-commerce-companies-tax-mexico/ https://mexiconewsdaily.com/business/e-commerce-companies-tax-mexico/#comments Tue, 31 Dec 2024 20:58:59 +0000 https://mexiconewsdaily.com/?p=425666 The new rule closes a tax loophole e-commerce companies like Amazon, Temu and Shein previously enjoyed on sales in Mexico.

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Foreign e-commerce companies such as Amazon and Temu will now have to pay Mexico’s 16% value-added tax (IVA) on products they export to and sell in Mexico.

The requirement is outlined in the Resolución Miscelánea Fiscal 2025 (2025 Miscellaneous Tax Resolution), which Mexico’s Finance Ministry published in the federal government’s official gazette on Monday.

Mexico's President Claudia Sheinbaum and its Economy Minister Marcelo Ebrard stand at a press conference in front of a long, thin table. Together they are holding up a portfolio cover with the document they signed to expand a 35% tariff on textile imports.
The tax requirement on foreign e-commerce companies comes on the heels of a decree signed earlier this month by President Claudia Sheinbaum, left, and Economy Minister Marcelo Ebrard, right, that placed a 35% tariff on foreign clothing imports. The tariff didn’t apply to countries that have a free trade agreement with Mexico. (Marcelo Ebrard/X)

In accordance with the new rule, digital platforms including Amazon and the Chinese companies Temu, Shein and Alibaba will have to pay the IVA to federal tax agency SAT even when payment for products is deposited into foreign accounts. IVA payments must be made on a monthly basis before the 17th of any given month.

E-commerce companies are now also obliged to enroll in Mexico’s Federal Taxpayer Registry as part of efforts to ensure they comply with all relevant tax obligations in the country.

To avoid falling afoul of tax laws in Mexico, such companies will have to collect a range of information including bank account details and location from all third parties selling products on their sites. In addition, foreign e-commerce companies will have to provide electronic receipts to third parties that detail tax payments that have been withheld.

The stricter tax rules come as Mexico is seeking to reduce its reliance on imports from China and other Asian countries. Chinese e-commerce sites (and brick-and-mortar stores in Mexico) sell a wide range of Chinese goods at prices that are significantly lower than those made in Mexico, raising concerns about the ongoing viability of various Mexican industries.

Earlier this month, the federal government announced new tariffs on imported clothes and textiles in order to protect the Mexican textile/clothing industry, which the Mexican government says is losing jobs due to, in large part, unfair competition from underpriced Chinese imports. Mexican authorities have also raided stores in Mexico to seize counterfeit Chinese goods as well as products for which applicable import fees were not paid.

Obliging foreign e-commerce companies to pay IVA on products they sell in Mexico will create a more level playing field between foreign and Mexican businesses — and thus should make locally made goods more competitive.

Mexican tax revenue agency
Foreign e-commerce companies are now also obliged to enroll in Mexico’s Federal Taxpayer Registry, administered by the federal tax agency known colloquially as the SAT. (Internet)

In 2025, the government expects to collect an additional 15 billion pesos (US $719.2 million) in tax revenue as a result of e-commerce companies’ payment of the IVA.

Who will really end up paying?

According to media reports, there are concerns that e-commerce companies — whose sales in Mexico are on the rise — will pass on the new tax burden to their customers, even though it’s the companies’ obligation to pay the IVA.

“Although the 16% IVA is solely directed at digital platforms, concerns remain as to how the indirect transfer of this tax to the final consumer will be avoided,” reported the news website Debate.

“While the authorities have said that the 16% IVA will only be charged to the e-commerce platforms and not to customers, there are still doubts about how to prevent final consumers from paying it,” the newspaper El Economista said.

With reports from Debate, El Economista and Infobae

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Peso falls to 20.9 to the dollar in its fourth consecutive day of depreciation https://mexiconewsdaily.com/news/mexican-peso-depreciates-2024-over-20-8-us-dollar-fourth-consecutive-day-depreciation/ https://mexiconewsdaily.com/news/mexican-peso-depreciates-2024-over-20-8-us-dollar-fourth-consecutive-day-depreciation/#comments Tue, 31 Dec 2024 16:57:42 +0000 https://mexiconewsdaily.com/?p=425627 The peso is on track to depreciate more in 2024 than any year since the 2008 financial crisis.

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The Mexican peso depreciated in early trading on Tuesday, losing ground against the US dollar for a fourth consecutive day as 2024 comes to a close.

After closing at 20.66 to the greenback on Monday, the peso fell to 20.90 shortly before 2 p.m. Mexico City time on Tuesday. The tumble marked a 1.16% depreciation, bringing the peso to its weakest position in all of 2024.

The peso’s depreciation on Tuesday came after the currency fell 1.67% against the greenback on Monday.

The expectation that the Bank of Mexico’s benchmark interest rate will continue to decline in 2025 after five cuts this year is one factor contributing to the decline of the peso in recent days. Concern over the potential impact of the second Trump administration on the Mexican economy is another.

United States President-elect Donald Trump, who will take office on Jan. 20, has pledged to impose a 25% tariff on all Mexican exports on the first day of his second term and keep it in place until Mexico does more to stop the flow of drugs and migrants to the U.S.

In a post to X on Tuesday morning, Banco Base’s director of economic analysis, Gabriela Siller, attributed the recent depreciation of the peso to “fear” over Trump’s return to the White House.

“The exchange rate is shaping up to end the year at close to 21 pesos per dollar. There is fear over the return of Trump,” she wrote.

Cipactli Jiménez, an independent investment adviser, told the El Economista newspaper that “there is great uncertainty” regarding the relationship Mexican President Claudia Sheinbaum will have with Trump.

Uncertainty over the impact the policies of the second Trump administration will have on the Mexican economy “is reflected in the [current USD:MXN] exchange rate,” he added.

The worst year for the peso since 2008 

According to Yahoo! Finance, the Mexican peso closed at 16.86 to the US dollar on Dec. 31, 2023. Thus the peso has depreciated around 19% in 2024.

Compared to the 16.30-to-the-dollar rate the peso reached in April, the depreciation is almost 22%.

The peso depreciated sharply after the ruling Morena party’s comprehensive victory in Mexico’s June 2 elections. Concern over Morena’s constitutional reform agenda, especially the judicial overhaul that Congress approved in September, was a major factor in the decline.

The election of Trump in early November, and the former and future president’s tariff threats, placed additional pressure on the peso.

On Monday, Siller noted on X that the peso was on track to record its fourth-worst year since Mexico implemented a free-floating exchange regime in 1995.

“If the exchange rate ends the year at today’s level (20.55 pesos per dollar) it will be the fourth largest annual depreciation [for the peso] since we’ve had the free-floating exchange regime,” she wrote.

The Banco Base analyst said that the annual depreciation this year would rank behind a 51.63% decline in 1995, a 22.87% depreciation in 1998 and a 25.46% weakening in 2008 amid the global financial crisis.

With reports from El Economista, Reuters and Bloomberg Línea

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Sheinbaum casts doubt on New York Times fentanyl report: Monday’s mañanera recapped https://mexiconewsdaily.com/politics/sheinbaum-new-york-times-fentanyl-report-monday-mananera-recap/ https://mexiconewsdaily.com/politics/sheinbaum-new-york-times-fentanyl-report-monday-mananera-recap/#comments Mon, 30 Dec 2024 23:08:25 +0000 https://mexiconewsdaily.com/?p=425392 Sheinbaum also discussed Morena senators' response to Trump's plan to designate Mexican cartels as terrorist groups.

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After visiting the states of Jalisco and Tlaxcala on the weekend, President Claudia Sheinbaum was back at the National Palace in Mexico City on Monday for her morning press conference.

At her mañanera, as the president’s weekday morning presser is colloquially known, Sheinbaum spoke about a range of things including a New York Times Mexico dispatch from a fentanyl lab in Culiacán and the ruling Morena party’s apparent media strategy in response to Donald Trump’s promise to designate Mexican cartels as foreign terrorist organizations on his first day in office.

NYT report on fentanyl production in Sinaloa ‘not very credible,’ says Sheinbaum  

Sheinbaum noted that The New York Times published a report on Sunday about fentanyl production in Sinaloa.

“An article came out that is important to highlight, in which two reporters allegedly go into a fentanyl laboratory,” she said.

“We talked about it in the security cabinet [meeting] today,” Sheinbaum said of the report headlined “‘This is What Makes Us Rich’: Inside a Sinaloa Cartel Fentanyl Lab.”

The president subsequently asserted that the photographs accompanying The New York Times report don’t in fact show the production of fentanyl. She claimed that the photos (and video) actually show the production of methamphetamine.

Mexican authorities remove fentanyl pills, methamphetamine and cocaine from a drug lab found in Culiacán, Sinaloa, in February.
Mexican authorities remove fentanyl pills, methamphetamine and cocaine from a drug lab found in Culiacán, Sinaloa, in February. (FGR/Cuartoscuro)

“The production of methamphetamine is one thing and another very different thing is [the production of] fentanyl,” Sheinbaum said.

“… So [the report] is not very credible, let’s put it like that,” she said.

Fentanyl is not produced in the way the Times’ photographs demonstrate, Sheinbaum asserted.

“Fentanyl is produced in other ways,” she said, adding that either the Navy Ministry or health regulator Cofepris “could report on” the methods used to produce the synthetic opioid largely responsible for the drug overdose crisis in the United States.

“The photographs aren’t credible,” reiterated Sheinbaum, who declared that her government would “scientifically prove” the alleged inconsistencies between the Times’ reporting and photos.

On Monday afternoon, The New York Times said on social media that it was “completely confident” in its reporting on “the production and testing of fentanyl in Mexico.”

“Our reporters spent months investigating the fentanyl industry, quoted current and former Mexican officials on the record about the production and testing of fentanyl in the country, and documented a fentanyl lab in Sinaloa. We stand by the reporting fully,” the Times said.

Earlier this month, Sheinbaum rejected a New York Times report stating that the Sinaloa Cartel had recruited chemistry students to make fentanyl. She suggested that the newspaper drew inspiration for the Dec. 1 report from the television series “Breaking Bad.”

Sheinbaum denies knowledge of Morena ‘media strategy’ in response to Trump’s pledge to designate Mexican cartels as terrorist organizations

A reporter noted that the El Universal newspaper published details of a document that was reportedly sent to all Morena senators last week.

According to El Universal, “the Morena bench in the Senate designed a media strategy to reject the policy announced by the President-elect of the United States, Donald Trump, to classify Mexican cartels as terrorist groups.”

El Universal reported that the document outlining the strategy said that “the designation of Mexican cartels as foreign terrorist groups would represent the imposition of policies contradictory to the social treatment [of problems of violence] in the quest for peace and justice.”

Among other things, the document also reportedly said that a U.S. designation of Mexican cartels as terrorist organizations “would weaken Mexico’s international image.”

In addition, it warned of possible “revolts and armed uprisings” in Mexico if the U.S. military were to carry out operations against Mexican cartels inside Mexican territory.

Donald Trump speaking at CPAC 2011 in Washington, D.C.
The Morena party bench of the Senate designed a media strategy to speak out against Trump’s promise to designate Mexican cartels as terrorist groups, El Universal recently reported. (Gage Skidmore/Wikimedia Commons – Creative Commons Attribution-Share Alike 2.0)

Asked whether she knew about “these alarmist positions of Morena in the Senate,” Sheinbaum responded that she did not.

“I don’t know who drew up the document, I don’t know it,” she said. “I don’t want to offer an opinion on a document that I don’t know.”

Sheinbaum stressed that she didn’t know whether a single senator or a group of Morena senators wrote the document. She also said she didn’t know the “motive” of the document.

“What is important,” Sheinbaum said, is that Donald Trump, during his first term as U.S. president, had a “very good” and respectful relationship with former Mexican president Andrés Manuel López Obrador.

“And that’s why I trust that we’re going to have a good relationship of respect, of coordination, not of subordination,” she said.

Sheinbaum wishes Mexicans ‘a happy 2025’

Sheinbaum, who won’t hold morning press conferences on Tuesday or Wednesday, wished Mexicans “the best this new year” as well as “a happy 2025.”

She said that her government would conduct “an evaluation” of 2024 in Mexico in economic, social and political terms and report its findings at her press conference on Thursday.

Sheinbaum added that the Mexican people took two “transcendent” decisions when they went to the polls in June.

“The first is that [they voted for] the transformation to continue,” she said, referring to citizens’ strong support for the ruling Morena party and the so-called “fourth transformation” of Mexico initiated by López Obrador.

“… And, at the same time, they took the great decision for a woman to govern our country for the first time. This is part of the transformation, they go together, not apart,” Sheinbaum said.

By Mexico News Daily chief staff writer Peter Davies (peter.davies@mexiconewsdaily.com)

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Is Mexico the most democratic country in the world? Sheinbaum says it might be, thanks to judicial reform https://mexiconewsdaily.com/news/mexico-most-democratic-country-world-sheinbaum-judicial-reform/ https://mexiconewsdaily.com/news/mexico-most-democratic-country-world-sheinbaum-judicial-reform/#comments Mon, 30 Dec 2024 20:22:15 +0000 https://mexiconewsdaily.com/?p=425309 "Our adversaries say there is authoritarianism but how [can there be] if it is the people who decide?" Sheinbaum asked a cheering crowd in Tlaxcala.

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President Claudia Sheinbaum said Sunday that Mexico is “perhaps” the most democratic country in the world given that it will hold judicial elections in 2025.

Speaking at an event in Tlaxcala, Sheinbaum highlighted that a number of constitutional reforms were approved by Congress in recent months, allowing Mexico to “recover the social sense” and the “patriotic sense of our Constitution.”

Mexican President Claudia Sheinbaum stands on a stage in Tlaxcala to say that Mexico is possibly the most democratic country in the world. A crowd of people in cowboy hats watches
The visit to Tlaxcala concluded Sheinbaum’s presidential tour of all 32 Mexican states. (Presidencia)

“Thanks to senators and deputies, this year something unique in Mexico and the whole world was approved. Next year, on June 1, thanks to one of the reforms to the Constitution, the judicial power will be elected by the people of Mexico,” she said, eliciting cheers and applause from attendees of the event in Panotla, Tlaxcala.

Sheinbaum noted that Mexico’s president and lawmakers are already “democratically elected” before emphasizing that the nation’s judges will soon be chosen by citizens as well.

“Now judges, magistrates and Supreme Court justices will be elected democratically. This makes us perhaps the most democratic country there is on the face of Earth,” she said.

“Our adversaries say there is authoritarianism but how [can there be] if it is the people who decide? Democracy is government of the people by the people for the people. And now the judicial power will serve the people of Mexico and the nation as it should have always done,” Sheinbaum said.

A man casts his ballot in a Mexican election
The first round of judicial elections are scheduled for June 1, 2025. (Victoria Valtierra/Cuartoscuro)

The president, like her predecessor Andrés Manuel López Obrador, has argued that judicial reform was needed to rid the nation’s courts of corruption and other ills. López Obrador submitted the reform proposal to Congress in February and signed it into law two weeks before he left office at the end of September. A second round of judicial elections in 2027 will follow those scheduled to take place on June 1, 2025.

Critics assert that the election of judges will lead to the politicization of Mexico’s judiciary. In a nutshell, they argue that Mexico’s courts will come to be dominated by judges sympathetic to the ruling Morena party’s agenda, thus removing an essential check on government power.

Candidates for judgeships will be selected by the president, the Congress — which is currently dominated by Morena — and the judiciary itself. In 2025, citizens will elect a total of 881 federal judges, including nine justices who will sit on the bench of the Supreme Court, two fewer than is currently the case.

“On June 1 next year,” Sheinbaum said on Sunday, “together we will elect justices of the Supreme Court of Justice of the Nation.”

“It is something historic,” she added.

The government has also faced criticism over some of the other reforms that were recently approved by Congress, including one that eliminated seven watchdog agencies.

Government critics have long argued that the incorporation of autonomous agencies into ministries and other federal departments would eliminate important counterweights to executive power and represent a backward step for democracy.

Sheinbaum has said that the reform will lead to “more transparency” and help to eliminate corruption while generating significant savings for the public purse.

Mexico News Daily 

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Mass graves discovered at Mexico’s northern, southern borders https://mexiconewsdaily.com/news/mexican-authorities-mass-graves-chiapas-chihuahua/ https://mexiconewsdaily.com/news/mexican-authorities-mass-graves-chiapas-chihuahua/#comments Mon, 30 Dec 2024 18:10:27 +0000 https://mexiconewsdaily.com/?p=425245 The graves discovered in Chiapas and Chihuahua contained the bodies or remains of an estimated 29 people.

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Authorities have discovered 17 bodies in clandestine graves in the southern state of Chiapas, Mexico.

The Chiapas Attorney General’s Office and the state Security Ministry said Sunday that 15 bodies were found in the municipality of La Concordia in recent days, while two additional bodies were located in Palenque. All 17 bodies belonged to men.

Maps location of La Concordia, Chiapas
The bodies of 15 men were found in clandestine graves in La Concordia, Chiapas. An additional two bodies were uncovered in Palenque, near the border with Campeche. (Google)

La Concordia is located in southern Chiapas near the border region where the Sinaloa Cartel and the Jalisco New Generation Cartel are engaged in a long-running turf war.

Palenque, a municipality in northeastern Chiapas on the state’s border with Tabasco, is best known for the Palenque archaeological site. It is part of a region that has also been affected by cartel violence.

Chiapas Attorney General Jorge Luis Llaven Abarca told a press conference on Sunday that the 15 bodies discovered in La Concordia were found in 11 clandestine graves on two properties. Ten of the bodies were “mutilated,” he said, explaining that the victims had been “tortured” before they were killed.

“They have cuts in different parts of their bodies. They’re dismembered,” he said.

Authorities searching for clandestine graves in Chiapas
Authorities are continuing to search for clandestine graves in Chiapas, with the municipality of Catazajá, which borders Palenque, a current focus. (@ramirezlalo_/X)

Chiapas Governor Eduardo Ramírez said on social media on Saturday that in addition to the discovery of 15 bodies in the Frailesca region, of which La Concordia is part, four people were arrested and weapons, vehicles and drugs were seized during a state government security operation.

“We will continue with the operation. … We’re reestablishing tranquility and social peace in the region. We won’t take a backward step!” he wrote.

The two bodies discovered in Palenque were in two clandestine graves in the locality of Nueva Esperanza.

All 17 bodies found in Chiapas were taken to morgues to undergo testing aimed at determining the identities of the deceased, the cause of their deaths and how long they have been dead.

Authorities in southern Mexico are continuing to search for clandestine graves in Chiapas, with the municipality of Catazajá, which borders Palenque, a current focus.

Llaven said that authorities are searching for people who have been forcibly abducted or “disappeared.”

He said that the Chiapas Attorney General’s Office had received 124 reports of cases of enforced disappearance this year but acknowledged that many cases go unreported due to families’ fear of reprisal.

The discovery of the 17 bodies in La Concordia and Palenque came after human remains were found earlier this month in Emiliano Zapata, a municipality near Tuxtla Gutiérrez, the capital of Chiapas. Authorities have not yet determined how many people the charred remains belonged to. They were specifically searching for seven people who were abducted in November, among whom was a 12-year-old boy.

‘Possibly human’ remains found in municipality that borders US

The Chihuahua Attorney General’s Office (FGE) said last Thursday that “bone remains” of 12 “indeterminate skeletons” had been found in 11 clandestine graves in the municipality of Ascensión, which borders New Mexico.

The discovery of the remains occurred during search operations carried out on Dec. 18, 19 and 20, the FGE said in a statement.

Maps location of Ascensión, Chihuahua
Skeletal remains were also discovered in Ascensión, a town near the border with New Mexico. (Google)

The exhumation of the “possibly human” remains was carried out by forensic anthropologists and other experts, the Attorney General’s Office said. The experts collected spent cartridge cases from the graves, the FGE said.

“The indeterminate skeletons and evidence found were transported to the laboratories of the Forensic Medical Service in Ciudad Juárez for analysis and investigations to determine identities and the cause and time of death,” the FGE said.

The Chihuahua Attorney General’s Office has not yet announced the results of the testing.

Chihuahua, which borders both New Mexico and Texas, is one of Mexico’s most violent states.

With more than 1,800 homicides between January and November, the northern state ranked fourth among the country’s 32 federal entities for total murders in the first 11 months of 2024.

With reports from El Universal and EFE 

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