Mexican President Sheinbaum Downplays Impact Of Reduced Remittances From The U.S.: 'Hasn't Been That Drastic'

Mexican President Claudia Sheinbaum downplayed the impact of the reduced amount of remittances sent to the country from the U.S., claiming it "has not been that drastic."

Speaking at her daily press conference, Sheinbaum made reference to figures on the matter noting that remittances have dropped both compared to the past month and year-on-year.

"They dropped especially from June to July. So far this year the reduction is not 16, that is for June, but 5%. Remittances increased a lot in 2023 and more se in 2024, we are seeing 2022-like levels at the moment," she said, according to Infobae.

Sheinbaum was making reference to the fact that remittances fell 16.2% year-over-year, the steepest decline for that month on record, according to the Bank of Mexico. Meanwhile, year-to-date, transfers are down nearly 6%. While the average amount sent per transaction has risen slightly to $409, the overall volume has decreased, marking a reversal after 11 consecutive years of growth.

"What explains this? Mostly the U.S. tax on our migrant brothers. We are working to know exactly the cause for the reduction, the amount of Mexicans who have been repatriated, but if we compare it with previous periods it's not that high."

However, other reports show that at least some communities that have long depended on remittances are facing an abrupt slowdown.

The Washington Post reported that communities in Oaxaca, historically major sources of U.S. migrants, are particularly affected. In some areas, remittances account for more than 10% of local economic activity, supporting construction, small businesses, and family expenses. Local officials note that fewer families are receiving consistent payments, leaving towns struggling to maintain economic activity.

Experts consulted by the outlet explained that the Trump administration's immigration crackdown has prompted both voluntary returns and reduced work participation among Mexicans in the U.S., while fewer new migrants are entering the labor market. Analysts note that remittance flows naturally depend on ongoing migration, and Mexico's migration levels have fallen over the past 15 years.

After record levels of $64.7 billion in 2024, remittances to Mexico are projected to fall to $61 billion this year, a decline driven by both reduced U.S. labor participation among Mexican migrants and fear of deportation.

The decrease in Mexican remittances contrasts with rising flows to Central America, where migration from Guatemala, Honduras, and El Salvador has increased. In those countries, remittances represent even larger shares of GDP: over 25 percent in Nicaragua and Honduras, 23.5 percent in El Salvador, and 19.5 percent in Guatemala, compared with roughly 3 percent in Mexico.