Finance Division comment on US Tax Reform. The Dark Side for Mexico

The negative expectations for Mexico, include more than anything the possibility that less US taxes, imply lower capital flows in established investments and potentially new ones, and then it implies lower dollar's supply and exchange rate pressures, as well as a economic loss on Investment in GDP.

Less taxes in the US, would attract investments, main offer to validate the reform socially from the Republican Party. Then, they aspire to sustain investments that are analyzing to go out and retract those outside that Nation from US origin.

If a significant effect on investment mobility is achieved, and given that Mexico depends at least 50% of its Direct Foreign Investment from the US, data prior to the Mexican energy reform, it could probably generate impairments in the flow towards Mexico.

The energy reform itself will provide strong FDI to Mexico, and the commercial sector, is not damaged because they seek to obtain gains in the Mexican market directly. But, manufacturers could have relevant problems. Therefore, the analyzes that the organized private sector formulates to promote a compensation in tax reform in Mexico must take care of the sectoral quantification.

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