OMM Redaksiyası
Trade talks between Mexico and the United States have accelerated with less than eight weeks remaining before the US midterm elections. According to six sources familiar with the negotiations, the lack of progress in talks between Washington and Canada has increased pressure to reach an agreement.
The two sides are discussing an interim deal that would provide Mexico with exemptions from some US tariffs. In return, Mexico is expected to offer concessions on several issues, including local-content requirements in the automotive industry and Chinese investment.
Although no formal deadline has been set, officials in both countries view reaching an agreement before the Nov. 3 elections as politically beneficial. US President Donald Trump and Mexican President Claudia Sheinbaum could present such a deal as evidence of progress amid domestic political pressure.
Mexico’s Economy Ministry said there was no specific deadline but stressed its commitment to the negotiations. The US Trade Representative and the White House did not immediately respond to requests for comment.
Mexico chooses cooperation
The urgency of reaching an agreement in Mexico has increased since trade talks between the United States and Canada stalled last month. The two long-standing allies are currently involved in a tariff dispute.
Washington on Tuesday banned imports from Canada of a wide range of alcoholic beverages, motorcycles and dairy products. Ottawa said it would respond with corresponding tariffs.
More than 80% of Mexico’s exports are destined for the United States. As a result, Mexico is seeking to avoid confrontation with Washington and secure exemptions through cooperation.
The talks intensified further this week. US Commerce Secretary Howard Lutnick held a videoconference with Sheinbaum on Thursday to discuss trade issues.
The meeting took place less than two weeks after Sheinbaum proposed a bill that would give Mexico new powers to oversee foreign acquisitions of Mexican companies and, in some cases, block them. The proposed system resembles investment-screening mechanisms in the United States and Canada and is viewed as an attempt to address Washington’s concerns over Chinese investment.
Auto tariffs remain a key obstacle
The talks are focused on reaching an interim bilateral agreement until broader issues under the United States-Mexico-Canada Agreement are resolved. The pact entered a period of uncertainty after the United States declined in July to extend it for another 16 years.
USMCA remains in force and is subject to annual review. However, the Trump administration is using the process to seek additional concessions from Canada and Mexico.
One of the main disagreements concerns Section 232 tariffs on steel, aluminum, automobiles and auto parts. Under national security measures, Mexican and Canadian steel shipped to the United States faces a 50% duty, while automobiles are subject to a 25% tariff.
Trump has reached agreements with several other trading partners to reduce auto tariffs. The tariff is set at 15% for Japan, the European Union and South Korea, and at 10% for the United Kingdom. This means some vehicles imported from those countries face lower duties than automobiles imported from Mexico and Canada.
Several automakers believe Washington could offer Mexico a framework similar to one discussed before talks with Canada broke down. The model would impose a 15% tariff on auto imports, with additional exemptions depending on the share of US-made components. As a result, the effective tariff rate could fall to about 7%.
