Mexico and the United States are accelerating negotiations aimed at reaching a bilateral trade agreement before the November 3 U.S. midterm elections, as both governments seek to protect cross-border commerce and provide greater certainty for businesses and investors.
The push has gained urgency following the collapse of recent trade discussions between Washington and Canada, which have triggered a new round of tariff tensions. Mexico is taking a more cooperative approach in an effort to avoid a similar confrontation with the Trump administration.
Tariffs and automobiles at the centre
One of the biggest obstacles is the U.S. tariff regime covering steel, aluminium and vehicles. Mexico wants reductions in tariffs that it argues are hurting its economy, while Washington is pressing for stronger U.S. content requirements in Mexican exports and measures aimed at limiting the role of Chinese companies and investment in North American supply chains.
Automotive trade is particularly important because Mexico is deeply integrated into U.S. manufacturing and supply networks. U.S. officials have been seeking tighter rules of origin and greater use of North American components, while Mexican officials want to preserve the competitiveness of the country’s export sector. Earlier rounds of negotiations also covered agriculture, labour, economic security and electronic payments.
Sheinbaum pushes for economic certainty
Mexican President Claudia Sheinbaum has said her government will defend Mexico’s sovereignty and will not accept an agreement that damages the country’s economy. She has also called for lower U.S. tariffs on Mexican steel, aluminium and automobiles.
For Mexico, reaching an agreement could help strengthen investor confidence at a time when companies are closely watching the future of the United States-Mexico-Canada Agreement (USMCA) and the direction of North American trade policy.
Political deadline
The negotiations are unfolding against a tight political timetable. With the U.S. midterm elections approaching, both Washington and Mexico have an incentive to demonstrate progress.
However, major disagreements remain, particularly over tariffs, automotive rules, Chinese investment and the future structure of North American supply chains. The outcome of the talks could therefore shape not only Mexico-U.S. trade but also the future of the wider USMCA framework.
If an agreement is reached before the elections, it could provide businesses with greater certainty and reinforce economic ties between the two neighbours. Failure to reach a deal could instead prolong tariff uncertainty and increase pressure on an already strained North American trading relationship.
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