The Briefing:
- With three weeks until the November 3 U.S. midterms, Mexico and the United States are still working toward a bilateral USMCA deal; Sheinbaum confirmed Monday that negotiations are active but no final agreement has been reached.
- The core gap: the U.S. proposed a 10-year extension with annual reviews at the July 1 joint review; Mexico and Canada pushed for the full 16-year renewal — Sheinbaum said Monday that "that possibility is not closed."
- Canada has been absent from negotiations since its trade talks with Washington collapsed on August 22, leaving Mexico as Washington's only active USMCA partner at the table — with $872 billion in annual goods trade on the line.
Mexico and the United States are in a quiet sprint. With the November 3 midterm elections now three weeks away, both governments are pushing to announce a framework agreement on the USMCA's future before American voters head to the polls — though as of Monday, October 12, no deal has been reached.
Mexican President Claudia Sheinbaum confirmed at her morning press conference that talks remain active, responding to U.S. President Donald Trump's remarks at a Saturday campaign rally in Clarksville, Tennessee, where he said he intends to close a new trade deal with Mexico. The two sides are not far apart on broad intentions — only on timeline and structure. Mexico and Canada have both sought a 16-year renewal of the agreement, while Washington has proposed a 10-year term paired with annual reviews. On whether the longer option remains available, Sheinbaum told reporters: "That possibility is not closed."
The Review That Reset Everything
The current phase of negotiations was triggered on July 1, 2026, when the USMCA Free Trade Commission held its mandatory six-year joint review. Washington's trade representative formally declined to renew the agreement in its current form, activating the annual review mechanism enshrined in Article 34.7 of the deal. Under that mechanism, the three parties must reassess every year; without a new agreement, the treaty expires July 1, 2036.
Three formal negotiating rounds between Washington and Mexico City were held between May and July 2026, covering automotive rules of origin, steel and aluminum duties, energy provisions, and agricultural market access. In a Senate Finance Committee hearing last July, USTR Jamieson Greer said the administration may have "options for interim arrangements" before the year is out — language that suggests a partial deal rather than a full treaty extension may be on offer.
What Mexico Has — and What Is at Risk
The economic weight behind these negotiations is difficult to overstate. US–Mexico goods trade hit a record $872 billion in 2025 — equivalent to roughly $2.4 billion changing hands every day — and Mexico has been the United States' top goods trading partner for three consecutive years. The Congressional Research Service notes that more than 80 percent of Mexico's exports are shipped to the United States, making the bilateral relationship the structural backbone of the Mexican economy.
Mexico's position within the North American trade architecture is real but conditional. In April 2026, Mexico accounted for 16.9 percent of all U.S. goods imports — a monthly record driven by electronics, auto parts, and advanced manufacturing shipments. Goods that meet USMCA rules of origin enter the United States duty-free; those that do not face tariffs of 25 percent or higher, on top of a 50 percent Section 232 levy on steel and aluminum. Economy Minister Marcelo Ebrard has made reducing those metal duties, and the 25 percent charge on automobiles, Mexico's clearest demand in every round of talks.
Canada's Absence Changes the Entire Equation
The bilateral dynamic intensified sharply when US–Canada negotiations fell apart in late August. On August 22, Canadian Prime Minister Mark Carney announced the suspension of trade talks with Washington, saying last-minute U.S. demands had undermined a nearly completed deal. The United States responded with a 50 percent tariff on roughly $20 billion in Canadian goods; Ottawa retaliated in kind. USTR Greer said no new talks with Canada were planned.
That rupture cast a long shadow over the USMCA's future as a three-country framework. Sheinbaum has been careful not to be drawn into the US–Canada standoff, consistently declining to suggest Mexico would coordinate with Ottawa or push for a side deal. The calculation is deliberate: maintaining a distinct bilateral channel to Washington is Mexico's most valuable diplomatic card right now.
Rating agency Moody's has flagged the structural risk in this dynamic, warning in August that the T-MEC review could drift primarily toward a bilateral arrangement between Mexico and the U.S. — a process that might not conclude until 2027, sustaining commercial and investment uncertainty across the region.
The Closing Political Window
Both sides understand the calendar is working against them. A trade announcement before November 3 would carry significant electoral weight for Trump's Republican Party, which entered the midterm cycle with narrow majorities in both chambers and now faces unfavorable early polling. Delivering a tangible win in a high-profile foreign economic relationship — one that directly affects manufacturing and agricultural jobs in swing states — would give Republican candidates a concrete argument for voters.
For Sheinbaum, a favorable outcome validates her strategy of patient, disciplined engagement. In a September 18 statement reported by Reuters, she said her government is doing everything possible, "within the framework of sovereignty, respect, and what is best for Mexico, to reach a deal soon." Whether that deal takes shape as a full 16-year renewal, a shorter bridging framework with annual reviews, or a partial sector agreement, what gets signed — or fails to get signed — in the next three weeks will set the commercial rules of North America for the rest of the decade.
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