President Donald Trump’s administration has agreed to halt a 5% increase in tariffs on Mexican goods to extend the trade deal deadline, set to expire Nov. 1, to a “few more weeks.”
The U.S. agreed in July to a 90-day pause on the increase in tariffs from 25% to 30% on imported goods from Mexico, to give the two countries more time to reach a trade settlement. The time has expired; however, with a phone call to Trump, Mexican President Claudia Sheinbaum reached an agreement to extend it.
Trump has blamed Mexico for allegedly lacking control over the illegal flow of migrants and fentanyl into the U.S. Trump has moved to place a 25% tariff increase on Mexican goods that are not compliant with the United States-Mexico-Canada trade agreement. Like Canada, Mexico has avoided the brunt of Trump’s tariffs because the USMCA prevents any tariffs on goods that are USMCA-compliant.
Currently, Mexico pays a 25% tariff on Fentanyl, a 25% tariff on cars and a 50% tariff on steel, aluminum and copper.
Mexico is the largest trading partner with the U.S., amounting to $935 billion traded in total goods and services in 2024.
President Sheinbaum said in a news conference that she spoke with Trump on Oct. 18, agreeing to an extension on a trade settlement.
“We agreed to speak again in a week or so, because we are practically closing the issue. Because ultimately, on November 1, that deadline closes,” Sheinbaum explained in regards to the two countries’ efforts in resolving the 54 non-tariff trade barriers, such as intellectual property disputes.
Mexico has made strategic efforts to minimize tensions with the U.S. On Sept. 10, Mexico announced an increase in imports from China and other Asian countries from 20% to 50%, which analysts believe is a way to placate Trump. In the past, Trump has warned Mexico not to act as a “back door” for Chinese goods moving into the U.S.
In addition to implementing tariffs, Mexican companies have adjusted their goods to be compliant with the USMCA to avoid tariffs, making 90% of Mexican exported goods to the U.S. now compliant. Sheinbaum also mentioned earlier in October that she would unveil new advancements in projects for electric vehicles, semiconductors, satellites, drones and artificial intelligence.
The U.S. and Mexico continue working closely together to reach a trade settlement, and Mexico has announced its commitment to resolving the 54 trade barriers, with the country’s effort partly a product of appeasing the Trump administration’s dissatisfaction with alleged immigration and drug flow.
