Sheinbaum secures this week's tariff relief agreement: A summary of Thursday's negotiations
Mexico has secured a 90-day extension on the latest tariff threat from the United States, allowing both countries to negotiate a comprehensive long-term trade agreement. This extension was agreed upon after a telephone call between Mexican President Claudia Sheinbaum and U.S. President Donald Trump.
During the call, Mexico agreed to continue paying existing tariffs, including a 25% levy on fentanyl-related goods, cars, and 50% on steel, aluminum, and copper. The extension also means that the U.S. will not impose a threatened 30% tariff, as originally scheduled for this Friday.
The tariff extension provides a diplomatic window for both countries to work towards a stable, long-term trade arrangement. This is crucial, as prior tariff impositions and retaliations linked to the United States-Mexico-Canada Agreement (USMCA) and concerns surrounding cross-border issues like fentanyl flow have threatened economic stability.
Mexico's trade officials, led by Foreign Minister Marcelo Ebrard, have been active in Washington for negotiations. Ebrard described Sheinbaum's handling of the discussion with Trump as "splendid" and her capacity to persuade Trump as "remarkable."
Notably, 84% of Mexico's trade with the United States currently complies with the USMCA and is therefore tariff-free. However, fresh Mexican tomatoes face a 17% tariff, imposed by the United States earlier this month, due to concerns about Mexico's lack of action against fentanyl trafficking.
Mexico continues negotiating on steel and auto tariffs, with efforts being made to have them eliminated or reduced. However, Mexico did not commit to any 'additional action' to win tariff reprieve.
The key to achieving the agreement to avoid the 30% tariff, according to Sheinbaum, is mutual respect. De la Fuente lauded Sheinbaum's leadership, dialogue skills, firmness in defending Mexico's interests, and intelligence in conducting the conversation with Trump.
The Washington Post described Sheinbaum as "the world's leading Trump whisperer." With this extension, Mexico has 90 days to build a long-term trade agreement through dialogue with the United States government. The 'most important thing' for Mexico, as stated by Sheinbaum, is to continue to have the best possible trading situation with the United States.
The extension also means that a 50% U.S. tariff on copper products, scheduled to take effect on Friday, will not be implemented. This provides a temporary reprieve for Mexican businesses and consumers affected by these tariffs.
In summary, Mexico's approach in the next 90 days is focused on negotiating trade terms with the U.S. to avoid new tariffs, maintain existing trade commitments, and aim for a lasting agreement that addresses bilateral trade issues comprehensively.
- The negotiation on steel and auto tariffs between Mexico and the United States is ongoing, with the goal of eliminating or reducing these tariffs to secure a stable trade agreement.
- The extension of the tariff threat from the United States has provided a diplomatic window for both countries to pursue policy-and-legislation and politics that contribute to a long-term trade agreement, ensuring the best possible trading situation for Mexico's economy.
- The 90-day extension on tariffs allows Mexico to continue discussions with the United States on general-news matters such as fentanyl trafficking and cross-border issues, which are key concerns in the economy and business sector of both nations.
