Sheinbaum Steps Into Year Two With Strength

Investors weigh security gains against U.S. tensions

Photo: Cuartoscuro

President Claudia Sheinbaum has entered her second year in office with remarkable momentum: unusually strong approval ratings, early policy wins, and the historic symbolism of being Mexico’s first female president. Her first Independence Day grito this week, delivered before a massive crowd in Mexico City’s Zócalo, underscored both her personal place in history and the broader challenges she faces at home and abroad.

On Monday night, Sheinbaum, 63, stood on the National Palace balcony and rang the bell used by Miguel Hidalgo in 1810, echoing the call that launched Mexico’s war of independence. But she marked the moment with new emphases. She highlighted women often left out of the patriotic ritual, including Gertrudis Bocanegra and María Manuela Molina, and referred to Josefa Ortiz de Domínguez by her maiden name, Josefa Ortiz Téllez-Girón.

Before stepping onto the balcony, she and her husband paused before a newly added portrait of Leona Vicario, while she wore a sash made by female military officers and accepted the flag from an all-female honor guard. For many of the 280,000 attendees, especially women, it was a deeply symbolic shift.

That symbolism complements a first year in which Sheinbaum has balanced continuity with change. She has maintained the social welfare programs and morning press conferences of her predecessor, Andrés Manuel López Obrador, while striking a calmer, more diplomatic tone that reassures business leaders. She continues to echo AMLO’s populist slogan — “For the good of all, the poor first” — but frequently stresses the role of entrepreneurs in Mexico’s future.

Her clearest break has been on security. Rejecting AMLO’s “hugs not bullets” approach, Sheinbaum has overseen a reported 25 percent drop in homicides through aggressive action against organized crime, dismantling fentanyl labs, conducting high-profile busts, and extraditing cartel leaders. These moves have won cautious praise in Washington but also highlight Mexico’s growing reliance on U.S. security cooperation.

Managing that relationship remains her greatest external test. President Trump has pressured Mexico on migration and trade and authorized the Pentagon to explore military action against cartels. Sheinbaum has responded with measured firmness — rejecting outside intervention while avoiding open confrontation — a balancing act crucial to investor confidence and Mexico’s economic trajectory.

Politically, Sheinbaum has consolidated control within Morena by carrying forward AMLO’s constitutional reforms, while defining her presidency in more pragmatic, business-friendly terms. Yet her leadership carries a resonance beyond policy. She often says, “I didn’t arrive alone, I arrived with all Mexican women,” a message that continues to strengthen her cross-party appeal.

Her popularity remains robust, with surveys showing approval as high as 79 percent this week. That support was evident in the Zócalo, where families and especially younger women turned out in force. Among them was Jacqueline Olvera of Mexico City, who brought her six-year-old daughter, Naomi. “It’s important that she sees what it means to see a woman empowered and able to become president,” Olvera said. Naomi, dressed in a traditional outfit, called the night “special.”

As Sheinbaum begins her second year, she faces cartel wars, corruption, and rising living costs at home, alongside tense relations with Washington. But with strong domestic support and a sharpened governing style, she has already stepped out of AMLO’s shadow. The test now is whether she can maintain Mexico’s economic momentum while guarding its sovereignty in a turbulent global climate.

Sheinbaum’s Effects on Business at Home and Abroad

For Mexico’s business community, President Claudia Sheinbaum’s first year has been defined by a careful balancing act. Her government has paired continuity with Andrés Manuel López Obrador’s populist agenda and social spending with a more pragmatic tone aimed at building investor confidence.

At home, Sheinbaum’s message that entrepreneurs are vital to Mexico’s future offers reassurance to a private sector often wary of Morena’s populist roots. Her decision to maintain social programs ensures political stability, while her more diplomatic style reduces the risk of sudden shifts in policy.

The most immediate benefit for local business owners has come from her harder line on security. Authorities report a 25 percent drop in homicides, along with the dismantling of fentanyl labs and the extradition of cartel leaders. These actions improve operating conditions in regions long strained by violence, though corruption and rising housing costs continue to pose serious challenges, particularly for small and mid-sized enterprises.

International Investors

Sheinbaum’s biggest test comes from outside Mexico’s borders. President Trump’s tariff threats, pressure on trade concessions, and authorization of U.S. military planning against cartels inject volatility into the U.S.–Mexico relationship. For investors who have increasingly turned to Mexico as a nearshoring hub amid U.S.–China tensions, stability is paramount.

Sheinbaum’s response — firm rejection of U.S. intervention but avoidance of direct rhetorical clashes — has helped prevent market panic. Her repeated emphasis on sovereignty, underscored in her Independence Day address, signals political resolve without closing the door on pragmatic cooperation with Washington.

For international companies, Mexico remains attractive as a cost-competitive manufacturing base and logistics corridor into the U.S. market. If Sheinbaum can maintain security gains and avoid escalation with Washington, capital inflows into industrial parks, transport infrastructure, and housing construction are likely to accelerate. Her consolidation of power within Morena ensures policy continuity, but it also binds her to constitutional reforms that could raise questions for investors about the judiciary and regulatory environment.

The business outlook under Sheinbaum ultimately hinges on whether she can deliver a rare combination: preserving social stability, reducing crime, and keeping U.S. relations on an even keel. If she succeeds, Mexico’s appeal as a global supply chain hub will only grow stronger.

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Barber’s Mexico Business Report is sponsored by Genera Softlanding — trusted experts in helping companies establish operations in Mexico. Contact me Dean Barber, at dbarber@barberadvisors.com, for more information.