I just spoke with my friend Allan Wall, a Mexico analyst, and we discussed the fact that dollars are not going south, i.e., remittances or “remesas” in Spanish. This is the report:
According to the Banco de México , “In July of 2025, remittance income from the exterior [mostly the U.S.] totalled 5.33 billion dollars, a decrease of 4.7%.”
That’s 4.7% less than July of 2024.
The Banco also reported total remittances of January to July: “The accumulated sum of remittance income in the January to July 2025 period is 34.889 billion dollars, less than the 36.919 billion dollars registered in the same period of 2024 and indicates an annual decrease of 5.5%.”
What explains the decrease?
According to the Latin Times “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.”
This is fascinating because Mexico has grown accustomed to these dollars going south.
Most of the remittances are to family members or the Mexican version of a welfare program. So, a drop will have an impact in Mexico, sort of similar to cutting off people to welfare checks in the US. Yes, let me say it again. “Remesas” have become welfare funds for many Mexicans.
I recall a Mexican politician once saying that remittances should be invested in developing the economy, not just subsidizing people. Well, that idea never got to first base.
Over the years, I’ve spoken to many Mexicans about this dependence on remittances. They tell me that it’s embarrassing that Mexico, a country rich in resources, must depend on someone sending a monthly transfer to his mom. They unleash criticism of a government that won’t develop its own resources, such as oil, but would rather depend on foreign welfare.
Down in Mexico, they are blaming Trump for the slowdown in remittances. They should blame themselves for becoming so dependent on these transfers. I love Mexicans, but can’t say the same for the people who’ve been governing them for some time.
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