Mexico pursues US tariff deal as Canada trade talks collapse

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Mexico is seeking a trade agreement with the United States as relations between Washington and Ottawa deteriorate, with President Claudia Sheinbaum keeping her chief trade negotiator in the US capital to press for lower tariffs on Mexican exports.

Sheinbaum said she was optimistic that Mexico could reach an agreement with US President Donald Trump, after US-Canada negotiations broke down and prompted a new round of tariffs and planned retaliation. 

Mexico keeps negotiations open

Economy Minister Marcelo Ebrard will remain in Washington for several days to seek relief from US tariffs affecting Mexican steel, aluminium and vehicles.

Mexico faces US duties of 50 per cent on steel and aluminium, while cars are subject to a 25 per cent tariff. Mexican officials are attempting to secure less burdensome terms as the United States, Mexico and Canada begin reviewing the USMCA trade pact. 

“As President Trump said, we hope to reach an agreement with the US,” Sheinbaum told reporters. “I’m optimistic an agreement can be reached.” 

Mexico’s approach contrasts with Canada’s increasingly confrontational position. Rather than publicly threatening immediate countermeasures, Mexico is keeping talks active and pursuing a bilateral understanding with Washington.

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Canada-US dispute escalates

Negotiations between the US and Canada collapsed in recent days, with both governments blaming the other for derailing discussions. The talks had appeared close to an agreement that could have reduced tariffs on steel, aluminium and automobiles. 

After the breakdown, the US imposed 50 per cent tariffs on about USD 20 billion of Canadian goods. Canadian Prime Minister Mark Carney said Ottawa would respond with counter-tariffs that match US measures dollar for dollar, starting September 8. 

Trump has also said tariffs on Canadian cars, trucks, automotive parts and steel will rise to 50 per cent from January 1, 2027, an escalation that threatens a key part of North American manufacturing supply chains. 

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A test for North American trade

The dispute comes as the six-year-old USMCA enters its annual review process. The agreement binds the US, Mexico and Canada into one of the world’s largest trading blocs, with deeply integrated automotive, metals and agricultural supply chains.

Mexico is now trying to protect access to its most important export market while avoiding the type of tariff confrontation developing between the US and Canada. An agreement lowering duties on Mexican vehicles and metals could give the country a short-term advantage, but differing US tariff arrangements for its two North American partners could complicate the wider USMCA review.

For now, Ebrard’s continued presence in Washington signals that Mexico sees room for negotiation. Whether that optimism produces a deal—and whether it preserves the trilateral character of the regional trade pact—remains uncertain.

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