Key facts
- The White House has delayed a decision on copper tariffs due to concerns about increased manufacturing costs.
- The administration is prioritizing affordability ahead of the November midterm elections.
- Mexico and the U.S. are racing to reach a bilateral trade deal before the U.S. midterm elections.
- Mexico's economy ministry stated there are no specific deadlines for a trade deal with the U.S. at this time.
- Mexico proposed legislation to review and block foreign acquisitions of Mexican companies.
The White House has delayed a decision on imposing tariffs on refined copper amid concerns that such duties could increase manufacturing costs, according to sources. The administration is prioritizing affordability ahead of the U.S. midterm elections in November. Copper prices and stocks fell on the news.
Mexico and the United States are accelerating efforts to finalize a bilateral trade agreement before the U.S. midterm elections, a move made more urgent by the breakdown of trade talks between Canada and Washington. Officials in both countries see political advantages in securing a deal before the November elections, which could see the Republican Party lose control of Congress. A deal would allow both leaders to claim a victory amidst domestic political challenges.
Mexico's economy ministry stated that there are no specific deadlines for the trade talks at this time, emphasizing ongoing dialogue with Washington. U.S. Commerce Secretary Howard Lutnick recently met virtually with Mexican President Claudia Sheinbaum to discuss trade. This meeting occurred shortly after Sheinbaum proposed legislation that would grant the government enhanced authority to review and block foreign acquisitions of Mexican companies, a move seen as a response to U.S. pressure regarding Chinese investment.
The negotiations aim to establish an interim bilateral agreement that could provide Mexico with relief from certain U.S. tariffs, while also addressing U.S. demands concerning automotive content and Chinese investment. The collapse of trade talks between the U.S. and Canada has influenced Mexico's strategy to avoid direct confrontation, favoring cooperation to achieve tariff relief, as Mexico sends over 80% of its exports to the U.S.
Obstacles remain, including the Section 232 tariffs on steel, aluminum, automobiles, and auto parts. Mexico is reportedly expected to concede on U.S. demands for increased American content in vehicles, particularly in engines, electronics, and software, in exchange for potential tariff reductions.