President Sheinbaum's Bind
Mexican President Claudia Sheinbaum criticized the ICE raids that catalyzed days-long protests in Los Angeles, saying the city "wouldn't be what it is" without migrants.
"They migrate out of need and send resources to their families from there," the president added. "Mexicans will always have our backing and demand that their human rights be respected. They must know that, should they wish to return to Mexico, we will welcome them with open arms."
Another report quoted more of her remarks:
Mexican President Claudia Sheinbaum defended migrants living in Los Angeles, and claimed that at least 35 Mexicans had been detained in the recent raids carried out by immigration officers of the Trump administration.
. . . "Mexicans living in the United States are good men and women, honest people who went to the United States to seek a better life for themselves and to support their families. They are not criminals! They are good men and women!" Sheinbaum was quoted as saying in a speech.
Sheinbaum is implicitly acknowledging that Mexicans must emigrate to survive; the Mexican economy is notoriously weak:
Mexico’s lackluster economic performance has been the subject of much study, including by economists Gordon H. Hanson and, more recently, Santiago Levy. Factors holding back productivity growth include poorly functioning credit markets that limit borrowing; extensive monopolies in certain industries that limit competition and drive up costs; and a large informal sector that reduces tax revenue and limits firm size.
An informal economy is made up of mostly small businesses that are not taxed or regulated, with workers who lack benefits such as health care and pensions. Because informal firms are off the books, they typically cannot borrow from banks. In Mexico, the informal sector accounts for a staggering 24 percent of GDP and 55 percent of employment.
This is a major factor that drives migration to the US, and as President Sheinbaum points out, many of the migrants send money back to their families in Mexico:
Approximately 12.3 million Mexicans live abroad, both legally and illegally, with 97% of them living and working in the United States, according to BBVA Research. Last year Mexicans living abroad sent $64.75 billion back home in remittances, largely from Texas and California to states in central and western Mexico.
According to data recently released, in April of this year remittances back to Mexico dropped 12.1%. The Mexico central bank said April saw 8.1% fewer transactions than a year earlier, that’s down to 12.4 million transactions. For Mexico this is a devastating outcome.
How dependent is the Mexican Govt on these remittances? Remittances sent home by Mexicans working outside the country surpassed petroleum revenues in 2015. Oil Revenue in 2015 was 23.4 billion; remittances were $24.8 billion. Last year in 2024 remittances were $64.75 billion…. and in April of this year the remittances dropped by 12.1%.
If you don’t think there is a critical financial motive in this, think again.
Trump's Big Beautiful Bill contains a proposed tax on remittances from illegal migrants:
In just under two weeks, the House of Representatives introduced, modified and passed the One Big, Beautiful Bill of 2025 (the “House Tax Bill”). This Memorandum addresses a new proposed tax on certain persons sending money outside the United States (the “Remittance Proposal”).
. . . The Remittance Proposal, if enacted, would generally require certain senders to pay an excise tax equal to 3.5% on electronic transfers of funds to recipients outside of the United States.
. . . Remittance transfer providers would be required to collect this amount and deposit it with the Internal Revenue Service (“IRS”) on a quarterly basis. Remittance transfer providers would have secondary liability for the failure to collect this amount.
Verified U.S. citizens and nationals who send remittances via qualified remittance transfer providers would not be subject to this tax. For this purpose, a “qualified remittance transfer provider” means a remittance transfer provider that enters into a written agreement with the IRS, under which the provider agrees to verify the status of senders as U.S. citizens or nationals.
This would provide additional discouragement to illegal migration, as well as providing a way to cover expenses illegal migration cause to the US. But in discouraging migration to the US generally, Trump's policies eliminate the safety valve migration gives the Mexican government: if it's harder for Mexicans to leave, that increases pressure for economic reform. The "informal economy", after all, includes employment with drug cartels. Controlling the cartels would put more pressure on the government to expand formal-sector job opportunities.Mexico's problem in providing economic opportunity to its own citizens also complicates the issue of anti-ICE protesters waving Mexican flags. What's so good about Mexico if so many Mexicans have to emigrate to survive? In addition,
"These idiots waiving Mexican flags during the LA riots just gave Donald Trump the greatest political gift," Republican strategist Matt Wylie, who founded Freedom Project USA, told Newsweek. "It will be 'Exhibit A' as proof of an invasion. Those images have done more in the last few days to strengthen his ability to crackdown on illegal immigration than weeks of messaging ever could."
Like many politicians on the US side, President Sheinbaum is playing local Mexican politics in front of a national US audience, but she's also ignoring the issue that if Mexico had serious internal reform, the problems on both sides of the border would begin to disappear.