Key facts
- U.S. and Mexican trade negotiators are holding a third round of talks to revise the USMCA.
- The talks exclude Canada, which is facing new U.S. tariffs.
- Mexico's economy growth forecasts for 2026 and 2027 have been lowered due to trade uncertainty.
- Mexico seeks relief from U.S. tariffs on autos, steel, and aluminum.
- The U.S. aims to increase regional content requirements for North American vehicles.
- China's growing presence in Mexico's auto market is a point of contention.
U.S. and Mexican trade negotiators are meeting for a third round of talks aimed at revising the North American trade agreement (USMCA), while President Donald Trump has imposed new tariffs on Canadian goods. Mexico's economy faces a slower growth outlook for 2026 and 2027, with forecasts revised downward due to trade uncertainties. Analysts cite weak industrial production despite strong exports and government initiatives as contributing factors.
The USMCA's 10-year term with annual reviews, rather than a longer extension, has created uncertainty for long-term investment decisions, particularly in export-oriented sectors. While trade flows are expected to remain robust, potential changes to the agreement pose challenges. The auto sector is considered particularly sensitive to the ongoing negotiations, with Mexican officials reportedly rejecting proposed changes to rules of origin.
Mexico is seeking relief from U.S. national security tariffs on its autos, steel, and aluminum products. The U.S. is also pushing for increased regional content requirements for North American vehicles and broader 'economic security' measures to counter Chinese influence. China's growing market share in Mexico's auto sector, despite tariffs, is a point of contention.
Mexico's ambassador to the U.S., Roberto Lazzeri, expressed optimism about reaching a new deal by year-end, emphasizing the need for swift resolution to maintain competitiveness. However, Canada remains largely sidelined in the USMCA negotiations due to retaliatory tariffs imposed by the U.S.