The Briefing:
- Mexico's intentional homicide rate fell 53% over Sheinbaum's first two years — one of the steepest drops in the country's recent history — but seven states still account for nearly half of all killings, and extortion has not followed the same downward trend.
- Foreign investment hit a first-semester record of $34.97 billion, but the fine print tells a more complicated story: net FDI fell 11.7% from the previous year and fresh capital entering Mexico dropped roughly 13%, with the headline total inflated almost entirely by companies reinvesting profits already earned inside the country.
- President Sheinbaum enters year three with a 68% approval rating, a homegrown electric vehicle set for commercial production in mid-2027, and an open USMCA review whose outcome will define the economic relationship with Washington for the next decade.
MEXICO CITY — Thursday marks exactly two years since Claudia Sheinbaum Pardo was inaugurated as Mexico's first female head of state, and her government is using the occasion to draw a sweeping balance of what it calls the "second floor" of the Fourth Transformation — the progressive political project she inherited from her predecessor and mentor, Andrés Manuel López Obrador. The portrait the presidency paints is one of momentum. The portrait sketched by private-sector economists and independent security analysts is considerably more layered.
An Investment Record With an Asterisk
The headline economic figure Sheinbaum's team has reached for most aggressively this cycle is foreign direct investment. FDI totaled $34.968 billion in the first half of 2026, the highest amount ever recorded for the opening six months of any year, and the administration has presented it as proof of global confidence in Mexico's economic direction. The figure represents a 12% increase over the same period of 2024.
What the government's framing consistently leaves out is that net FDI on a balance-of-payments basis fell 11.7% from the first half of 2025, and fresh new investment — money brought in to start or expand operations — dropped approximately 13% over the same comparison period. The record total is being driven almost entirely by reinvested earnings: profits that companies already operating in Mexico chose to keep in the country rather than repatriate. That is a sign of operational confidence, but it is a different signal from the arrival of new capital and new industrial capacity.
On growth, Mexico's economy expanded 1.4% quarter-on-quarter in the second quarter of 2026 — the second-best performance among G20 nations for the period, behind only India — and 1.9% year-on-year in seasonally adjusted terms. The employment picture provided additional political cover: Mexico reached 60 million employed people for the first time, a milestone Sheinbaum tied directly to wage growth, noting that between 2018 and 2026 the minimum wage rose 154% in real terms, climbing from around 2,800 pesos a month to more than 9,500 pesos.
Private analysts have been quicker to note what those top-line numbers do not capture: sluggish broader growth, uneven regional development, and persistent concerns about legal certainty for foreign investors in the energy sector. The gap between macro optimism and micro-level unease over investment rules remains one of the defining fault lines of the administration.
Olinia Uno: A National Bet on Electric Mobility
One of the more symbolically charged moments of Sheinbaum's second year came on June 7, 2026, when the president drove a prototype onto a stage inside the Air Force hangar at the Santa Lucía military base north of Mexico City to unveil the country's first domestically developed electric vehicle. The vehicle, named the Olinia Uno, is a compact urban EV designed for intensive daily use and short urban distances, with a maximum speed of 50 kilometers per hour and a starting price of 150,000 pesos — approximately $8,600 USD at current exchange rates.
The Olinia Uno supports charging through standard household outlets at both 110V and 220V, takes between four and eight hours to charge depending on the power supply, and was built with an initial target of 50% locally sourced components — a share the government aims to raise to 75% by 2030. Commercial production is scheduled to begin in mid-2027, with an initial factory capacity of 20,000 units per year scaling to 50,000 within four years.
The project is presented as the centerpiece of a broader industrial ambition: to move Mexico from its decades-long role as a global assembly platform toward a country capable of designing and building its own technology. Sheinbaum framed the unveiling as a national achievement, saying the vehicle was designed by young Mexican minds for Mexico and for the world. Critics, however, noted that the project involves international technology partnerships — including with Chinese firms — a detail the government acknowledged while characterizing it as standard practice in modern industrial development. A freight variant, the Olinia Cargo, was presented separately in August 2026 and is slated for a late-2027 market launch.
The Homicide Drop: Real, Steep, and Uneven
No policy area has generated more debate than public security, and no claim the administration makes is harder to dismiss outright: the daily average of intentional homicides fell from 86.9 in September 2024 to 40.8 in August 2026, a reduction of 53%, according to the National Public Security Executive Secretariat — one of the steepest declines documented in Mexico's recent history.
The trajectory has been consistent across the two-year period. At the 22-month mark, the secretariat confirmed a 51% reduction in the daily homicide average. August 2026 registered the lowest monthly average in 12 years. The administration has set a target of bringing the daily average below 40 for 2026, a benchmark that, given the August reading of 40.8, remains within reach but has not yet been secured.
The picture has sharp edges, however. Seven states continued to account for roughly half of all intentional homicides recorded nationally, including Guanajuato, Baja California, Chihuahua and Sinaloa — reflecting the persistence of concentrated territorial violence driven by organized crime. Independent analysts further note that extortion has not followed the same downward trend as homicides, and that disappearances continue to affect communities in active conflict zones. The security gains, while genuine and significant, remain geographically uneven and structurally fragile.
"Coordination Without Subordination": Navigating Washington
The bilateral relationship with the United States under President Donald Trump has defined much of Sheinbaum's foreign policy posture. The two leaders have met in person twice: first at the 2026 FIFA World Cup draw at the Kennedy Center in Washington in December 2025, and again at the World Cup final at MetLife Stadium in New Jersey in July 2026, where Sheinbaum used a sideline conversation to address trade. By the time of her second annual report, she had spoken with Trump more than 20 times by phone — a frequency that underscores the intensity of the bilateral relationship even in the absence of a comprehensive trade agreement.
Throughout those exchanges, Sheinbaum has held to a consistent formulation: bilateral cooperation is possible, but not at the cost of Mexican sovereignty. The phrase "coordination without subordination" has become the shorthand for that posture, and it has been applied to everything from drug trafficking operations to investment screening in strategic sectors. As the formal USMCA review process opened in 2026, Sheinbaum stated that Mexico had fulfilled its obligations and that the next move rested with Washington — a framing that placed the pressure on the U.S. side while keeping Mexico in a posture of cooperative engagement.
The stakes are considerable. The U.S. has pushed Mexico on investment screening, drug trafficking cooperation, and border management — all areas where Sheinbaum must balance domestic political imperatives against the deep economic dependency that defines the two countries' relationship.
A 68% Approval and an Unfinished Agenda
With an approval rating of 68% heading into her third year in office, according to El Financiero polling published by Mexico News Daily, Sheinbaum is politically intact and tracking to be the highest-rated Mexican president of the last six administrations. Her strongest ground is social spending; her weakest, public perception of security and corruption — a paradox given the homicide data, one her government continues to grapple with as official statistics and citizen experience diverge.
Whether the structural reforms her government has pursued will prove durable, and whether the security gains hold as cartel dynamics shift across the country's most violent states, will determine the longer arc of the Fourth Transformation's legacy — and of the presidency that claims to be building its second floor.
