Deal sealed by Sheinbaum on this week's tariff postponement: Thursday's recap detailed
Mexico has secured a 90-day reprieve from the threat of increased tariffs on its exports to the United States. This temporary relief comes as the two countries engage in negotiations to maintain the current tariff rates and safeguard the USMCA trade agreement.
During this period, Mexico aims to prevent any increase of tariffs on its exports, keeping the existing tariffs on fentanyl, cars, and certain metals stable. The country also seeks to secure a renewed framework to stabilise the trading relationship with the U.S., preventing future tariff escalations.
In addition to these goals, Mexico plans to strengthen trade ties with Canada, emphasising respect for the USMCA and scheduling high-level visits to address trade issues collectively. The country also encourages Mexican companies to source more U.S. products, particularly those imported from countries without a trade agreement with Mexico, to reduce the U.S. trade deficit and create incentives for permanent tariff relief in the longer term.
Mexico's strategy aligns with its efforts to mitigate the economic impact of tariffs while preparing for a possible negative outcome by intensifying trade diplomacy with other international partners to diversify its trade portfolio.
It is important to note that Mexico is the main trade partner of the United States. Currently, 84% of Mexico's trade with the U.S. complies with the USMCA and is therefore tariff-free. However, fresh Mexican tomatoes face a 17% tariff, while Mexican steel and aluminum face a 50% tariff when entering the United States, and vehicles are subject to a 25% duty, although U.S. content is exempt from the tax.
President Claudia Sheinbaum held a press conference at 10 a.m. on Thursday to discuss the progress made in the negotiations. Sheinbaum and her government treat Trump with respect and have made progress in the fight against fentanyl.
The key to achieving the deal to avoid the 30% tariff, according to Sheinbaum, is mutual respect. She had a telephone call with U.S. President Donald Trump earlier in the day, and no in-person meeting between the two leaders is planned at this time.
Mexico will continue negotiating on steel and auto tariffs, and the agreement protects the USMCA, the North America free trade pact that is scheduled for review in 2026. The country also aims to end its non-tariff trade barriers as agreed with the U.S. and to bolster its economy by increasing foreign investment and diversifying trade partnerships with other countries such as Canada, Brazil, China, and the European Union to reduce reliance on the U.S. market.
In conclusion, Mexico's 90-day reprieve from US tariffs provides a window of opportunity for both countries to strengthen their trading relationship and work towards a long-term agreement based on open dialogue and continued communication.
- Mexico's focus in this period of negotiations with the US is to maintain the existing tariff rates for fentanyl, cars, and certain metals, and to secure a renewed framework to stabilize the trading relationship, reducing the risk of future tariff escalations.
- Aiming to reduce the US trade deficit and create incentives for permanent tariff relief, Mexico encourages Mexican companies to source more U.S. products, especially from countries without a trade agreement with Mexico.
- As part of its strategy to diversify its trade portfolio and mitigate the economic impact of tariffs, Mexico also plans to strengthen trade ties with Canada, Brazil, China, and the European Union, increasing foreign investment and bolstering its economy.
