Mexico to analyse impact on remittances of US restrictions on undocumented migrants: President Sheinbaum
Mexico City, May 22
Mexico will analyse the potential impact on remittances of a new US executive order that would restrict undocumented migrants' access to US financial services, Mexican President Claudia Sheinbaum said.
At her daily press conference, reporters asked Sheinbaum whether the US measure would affect the flow of remittances -- the money that Mexicans working in the United States send to their families back home, Xinhua news agency reported.
According to Sheinbaum, the finance ministry and Mexico's newly appointed ambassador to the United States, Roberto Lazzeri, are analysing the measure jointly, but so far they have concluded there is "no major risk."
The US executive order tightens oversight of cross-border transfers and of identifications used to open bank accounts or apply for other banking services.
US President Donald Trump's latest immigration move could now bring banks and financial records into the centre of US immigration enforcement, potentially increasing scrutiny for some immigrants.
Trump on May 19 signed an executive order directing banks and financial regulators to examine "red flags" linked to customers' immigration and citizenship status as part of a broader crackdown on undocumented immigration, according to the White House.
"Many of those borrowers face the possibility of the loss of wages due to removal or their employers' decisions to comply with immigration law. Lending to aliens without legal work authorization or who face a substantial loss-of-wage risk creates a structural "ability to repay" deficiency that undermines the safety and soundness of the national banking system," Trump said in a press release.
Meanwhile, the US Congress is considering a proposal to impose a 5 per cent tax on remittances. Currently, only cash-based transfers are subject to a 1 per cent tax.
Mexican officials argue that such a measure would be tantamount to "double taxation," since Mexican migrants already pay taxes in the United States.
Remittances are among Mexico's largest sources of foreign currency inflows.
— IANS
Reader Comments
This is interesting – Mexico seems confident but I wonder if they're downplaying the risk. 5% tax on remittances is steep. Many Indian families in Kerala and Punjab depend on money from abroad too, so this sets a dangerous precedent.
The US keeps tightening rules, and yet migrants keep the economy running. It's ironic. In India, we see a similar pattern with our workers in the Middle East – they face discrimination but are essential for those countries' development. Solidarity with Mexico! 🇮🇳🇲🇽
Trump's logic about "ability to repay" is flawed. Hardworking migrants often earn more and save better than locals. These policies hurt families on both sides of the border. India's NRI policy should take notes on protecting workers abroad.
Respectfully, Mexico should be more proactive. Remittances are huge for their economy – $60 billion a year. India actually does better in managing diaspora relations. Our government provides legal aid and has strong bilateral agreements with host countries. Good learning opportunity for Mexico.
Remittances are the lifeline for many developing nations. India gets over $100 billion annually from our diaspora. If US starts taxing or blocking these flows, it's not just Mexico that suffers – it's a global issue. The Indian government should also monitor this situation carefully.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.