US Enters 90-Day Trade Negotiation Period with Mexico Amid Tariff Standoff

WASHINGTON (AP) — The United States is set to engage in a 90-day period of negotiations with Mexico over trade, while maintaining a 25% tariff rate on various imported goods, President Donald Trump announced on Thursday.

Successful Diplomatic Talks

Trump shared on his Truth Social platform that a recent phone conversation with Mexican President Claudia Sheinbaum was “very successful,” emphasizing a growing mutual understanding between the two leaders.

Current Tariff Structure

According to Trump, goods imported from Mexico will continue to incur a 25% tariff—an action he has linked to the ongoing crisis of fentanyl trafficking. Specific items such as automobiles will also be subject to the same 25% levy, while metals like copper, aluminum, and steel will face a hefty 50% tax.

Negotiations on Non-Tariff Trade Barriers

Trump indicated that Mexico would work towards eliminating its “Non-Tariff Trade Barriers,” although he did not provide detailed information on what these barriers entail.

Fending Off Increased Tariffs

Earlier in July, Trump had threatened a significant increase of tariffs to 30% on Mexican goods. However, thanks to the recent dialogues, Sheinbaum announced on X that Mexico could stave off this tariff hike for the next three months, allowing time to develop a more permanent solution.

Impact of the USMCA

Despite some goods still being protected from tariffs under the 2020 U.S.-Mexico-Canada Agreement (USMCA) negotiated during Trump’s first term, the president appears to have grown critical of the deal, which is due for renegotiation next year. Notably, one of his administration’s early moves was to impose tariffs on both Mexican and Canadian goods.

Trade Imbalance Concerns

Recent figures from the Census Bureau reveal a staggering $171.5 billion trade imbalance between the U.S. and Mexico in the previous year, indicating that the U.S. imports far more from Mexico than it exports. This imbalance has grown notably since the establishment of the USMCA, which clocked in at just $63.3 billion in 2016.

Fentanyl and Trade Goals

In addition to addressing fentanyl trafficking challenges, Trump has made closing the trade gap with Mexico a central goal of his administration as the negotiations proceed.