The Fourth Transformation and Economic Nationalism.
As of March 13, 2025, the exchange rate of the US dollar in Mexico is 20.1828 pesos per dollar, according to the FIX exchange rate published by the Bank of Mexico.
The reasons for the appreciation of the Mexican peso despite the instability caused by President Donald Trump and his tariff plan are very important to understand. Despite President Donald Trump's tariff threats, the Mexican peso has shown resilience and appreciation in recent months. Several factors have contributed to this trend:
- Postponement of tariffs: On March 6, 2025, the United States announced an extension until April 2 of the imposition of 25% tariffs on Mexican products, which provided a respite for the market and allowed the peso to appreciate.
- Market Optimism: The possibility of exemptions being granted to certain sectors, such as the automotive industry, has generated positive expectations among investors, driving the peso's recovery.
- Mexico's Economic Resilience: Despite tariff threats, the Mexican economy has shown strength, which has strengthened confidence in its currency.
These factors have contributed to the appreciation of the Mexican peso, even in an environment of uncertainty due to US trade policies. The 4T administration, led by Claudia Sheinbaum Pardo, has promoted a vision of strong economic nationalism. This entails prioritizing national interests, protecting economic sovereignty, and reducing foreign dependence, especially in strategic areas such as energy and food production.
The 4T's insistence on maintaining healthy public finances, without excessive debt and without devaluing the currency, has generated confidence among domestic and international investors. This has translated into a stronger peso, even under external pressures such as Donald Trump's tariff policy.
For example, when AMLO decided not to take on debt during the pandemic and kept inflation under control, markets saw stability, and this attracted foreign capital, which strengthened the peso.
The emphasis on regaining energy self-sufficiency, with projects such as Dos Bocas, the rehabilitation of refineries, and the purchase of Deer Park, sends a message of energy security. This reduces vulnerability to external shocks (such as tariffs or international prices) and generates economic certainty.
Although many analysts criticize these policies, the nationalist vision attracts domestic support, which translates into social and economic stability in certain sectors.
Despite its close relationship with the United States (our largest trading partner), the Fourth Transformation (T4T) seeks to diversify relations (more trade with Asia, South America, and Europe). This responds to a pragmatic nationalism, which wants Mexico to be less dependent on the USMCA and less vulnerable to pressure from politicians like Trump.
Therefore, when Trump threatens tariffs, Mexico shows negotiating firmness without losing its nationalist focus, which gives markets confidence that there will be no surrender or sudden crises.
The nationalist discourse also strengthens the ties of identity with Mexicans abroad. Remittances (which have broken records in recent years) not only support the economy but also represent an act of confidence from migrants in their country of origin. This has helped stabilize the peso and stimulate domestic consumption, even when international politics are tense.
The strength of the Mexican peso has been used in the Fourth Transformation's discourse as an achievement of the nationalist project. It is presented as proof that the country can maintain its strong economy without subordinating itself to foreign powers. Although external factors influence it (such as Banxico's interest rates and nearshoring), the government has managed to capitalize on the idea of a "strong peso" as a symbol of the success of the Fourth Transformation.
The stability of the peso and the recovery of its power are closely linked to a nationalist narrative, where the State takes a leading role in the economy. The nationalist culture of the 4T instills confidence in certain market sectors, who see internal stability despite external threats such as Trump's tariffs. Pride in self-sufficiency and the defense of sovereignty positively impact the perception of Mexico as a resilient and strong country, which reinforces investment and the appreciation of the peso.
What's happening with the strength of the Mexican peso, the economic nationalism of the Fourth Transformation (T4), and resilience to external threats, such as Trump's tariffs, also has a direct impact on Puerto Vallarta.
With a more stable peso and a strengthened domestic economy, Mexicans have greater purchasing power. This means more domestic tourists can afford to vacation in destinations like Puerto Vallarta.
Domestic tourism in Vallarta accounts for almost 60% of annual visitors, so having Mexicans traveling and spending here keeps local economies alive: hotels, restaurants, tours, taxis, craft markets, etc.
The stability of the peso and the nationalist rhetoric of supporting Mexican businesses builds confidence among Vallarta entrepreneurs. They are encouraged to invest in new businesses: from diners, cafes, and tour agencies to real estate projects and wellness centers. When the economy is predictable, banks lend more readily, and people take the risk of creating jobs in Vallarta, boosting local growth.
The commitment to energy sovereignty reduces dependence on foreign oil and favors domestic refineries and state-controlled energy. This helps stabilize Gasoline prices and electricity costs. What does this translate into? Lower operating costs for hotels, restaurants, tourist transportation, and services that depend on fuel and electricity. This attracts more business and keeps prices competitive at the port.
Many Vallarta families have relatives in the United States who send remittances. With the 4T's rhetoric of national pride and the strong peso, those remittances are worth more here and are spent on local businesses, healthcare, education, and even home construction. More remittances = more economic activity in Puerto Vallarta's working-class neighborhoods like Ixtapa, Las Juntas, Pitillal, and Las Aralias.
The 4T's nationalist approach includes investments in public infrastructure. Although the focus has been on the southeast (the Mayan Train), there are indirect benefits for key tourist destinations like Vallarta. Roads, airports, and air connectivity have been improved to encourage domestic and international tourism, especially so that more Mexicans can enjoy Vallarta. Although it may seem paradoxical, the nationalism of the 4T (T4th Transformation) has not slowed foreign investment; it has only redirected it toward more regulated projects. Vallarta remains attractive to foreign capital in the hotel, restaurant, and luxury real estate development sectors.
This generates well-paying jobs in construction, tourism services, hospitality, and vacation property management.
A stable peso means American, Canadian, and European tourists view Mexico as a safe place to visit and invest. This helps Puerto Vallarta remain a leader in international sun and beach tourism. Even in the face of threats from Trump or global ups and downs, Vallarta maintains its flow of tourists. Occupied hotels mean secure jobs for thousands of local families.
The nationalist narrative has also inspired cultural movements in Vallarta. There is greater interest in Mexican traditions, folklore, and traditional cuisine, attracting tourists interested in authentic experiences. More Day of the Dead festivals, food fairs, and crafts have a place in Vallarta's cultural tourism scene. The Fourth Transformation, its economic nationalism, and a strong peso aren't just financial figures. For Puerto Vallarta, they mean more domestic and international tourism, greater local investment, stable service prices, better job opportunities, and greater pride in Vallarta's culture.
How to resolve AdBlock issue?