MEXICO CITY—Fitch Rankings lowered Mexico’s sovereign debt score, saying the deteriorating credit score profile at state oil firm Petróleos Mexicanos weighs on authorities funds whereas the economic system is underperforming and the nation faces exterior threats on the commerce entrance.

Wednesday’s downgrade to BBB from BBB+ got here as Mexican officers met in Washington, D.C., with U.S. officers, looking for to persuade the Trump administration to desert threats to slap a 5% tariff on all imports from Mexico beginning June 10. The tariffs would step by step rise to 25% in October except Mexico does extra to curb a flood of Central American migrants reaching the U.S. border. The 2 sides agreed to proceed these talks Thursday.

Fitch modified the outlook on Mexico’s sovereign score to secure from unfavorable.

Fitch mentioned the downgrade “displays a mixture of the elevated threat to the sovereign’s public funds from Pemex’s deteriorating credit score profile, along with ongoing weak spot within the macroeconomic outlook, which is exacerbated by exterior threats from commerce tensions, some home coverage uncertainty and ongoing fiscal constraints.”

The federal government of President Andrés Manuel López Obrador has supported Pemex with capital and tax breaks in a bid to halt a 15-year-long decline in oil output on the state firm.

An expanded version of this report can be found at WSJ.com

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