MEXICO CITY, July 21 – Trade negotiators from the U.S. and Mexico are set to meet Tuesday for a third round of discussions aimed at revising the North American trade agreement, especially as President Trump implements new tariffs on Canada.
This round of talks, which does not involve Canada, is scheduled to unfold over three days. It’s notable as the first formal negotiations since the Trump administration opted not to extend the six-year-old regional trade pact on July 1.
This decision triggered a countdown that could end the USMCA within a decade unless all three countries can agree on necessary improvements. Various industry groups are urging President Trump to uphold the trilateral framework that allows for near-tariff-free access, which supports approximately $1.6 trillion in trade each year.
Roberto Lazzeri, Mexico’s new ambassador to the U.S., expressed on Friday his expectation that a new agreement could be reached by year-end, noting that both the U.S. and Canada seem to share this goal.
“I think every moment we’re losing, we’re losing competitiveness, we’re losing market share, we’re losing investment,” Lazzeri stated, emphasizing the urgency. “So it’s in the best interest of all three of us to get to a resolution early,” he added, highlighting his background as a former investment banker and Treasury official.
Additionally, Lazzeri pointed out that Mexico aligns with the Trump administration’s intention of boosting manufacturing in North America, which includes the U.S. A significant concern for Mexico is to achieve relief from Trump’s national security tariffs—25% on Mexican vehicles and 50% on steel and aluminum, which also apply to Canada.
These negotiations come on the heels of Trump’s announcement of new tariffs affecting about $20 billion in Canadian goods in response to Ottawa’s retaliatory measures on U.S. imports like automobiles, steel, and dairy products. This situation further complicates Canada’s absence from USMCA talks, with U.S. Trade Representative Jamieson Greer indicating little progress toward concessions.
Canadian Prime Minister Mark Carney stated that his government has presented a comprehensive proposal to resolve the trade disputes, asserting that Trump’s previous tariffs violate the North American Trade Agreement.
Meanwhile, Gurría commended Mexico’s non-retaliatory stance against U.S. tariffs, highlighting its “pragmatic” negotiation approach, which includes aligning export controls with the U.S., protecting intellectual property rights, and efforts to restrict avocado exports grown on illegally logged land.
The talks in Mexico City will explore the specifics of U.S.-Mexico trade, focusing on issues like automobiles, steel, aluminum, agriculture, and labor. There’s also a strong emphasis on “economic security,” a term used by the USTR to enhance regional trade protections aimed at preventing countries like China from using Mexico and Canada to gain access to the lucrative U.S. markets.
China’s increasing presence in Mexico’s auto market is a noteworthy concern in these negotiations. Reports indicated that Chinese car sales surged by 30% in the first half of 2026, despite the tariffs imposed in January, raising Chinese brands’ market share from 14% to 17% over the past year.
The U.S. is pushing for its North American partners to apply similar trade barriers on foreign products, including cars, auto parts, steel, and aluminum, according to insiders on the talks.
During previous USMCA negotiations in May, USTR introduced the idea of requiring that 50% of the value of vehicles produced in North America be made in the U.S. This would be a major shift from current practices and could challenge automakers due to existing integrated regional supply chains.
Greer noted that the widening trade deficit with Mexico, which has benefited from past tariffs directing supply chains away from China, is a significant concern for Trump. The U.S. Census Bureau reported that this deficit expanded by $28 billion, or 17%, reaching $197 billion in 2025.
