Mexican President Claudia Sheinbaum said her government will offset the newly approved 1% U.S. tax on cash remittances and is launching a state-backed debit card to help migrants avoid the levy altogether. Under the plan, migrants who send money in cash through the government’s Financiera para el Bienestar (Finabien) will be reimbursed for the 1% tax, while electronic transfers made with the new Tarjeta Finabien will remain tax-free. The card can be obtained at Mexico’s 52 consulates in the United States and will reduce Finabien’s commission per transaction to US$2.99 from US$3.99. The presidency estimates the tax will affect only about 10% of remittance flows, as most transfers are already electronic. Sheinbaum framed the cut in the remittance tax—from an initially proposed 5% to 3.5% and now 1%—as the result of joint lobbying by Mexican legislators, migrant groups and the Mexican government. Remittances are a critical source of income for Mexico, totalling nearly US$65 billion in 2024, or around 4% of GDP. Separately, the president endorsed the Bank of Mexico’s late-June decision to trim its benchmark rate by 50 basis points to 8%, the fourth consecutive cut, and called on commercial lenders to pass the easing through to borrowers, particularly small and mid-sized companies. She dismissed concerns that a recent uptick in inflation, running at roughly 4.3% in June, was tied to lower rates, describing the price pressures as largely seasonal.