MEXICO CITY/WASHINGTON: Mexico and the United States are racing to reach a bilateral trade deal before the US midterm elections in less than eight weeks, according to six sources in both countries familiar with the talks, an effort made more urgent by the collapse of Canadian negotiations with Washington.
"We both want to reach a deal before the midterms," said one Mexico-based source.
The negotiations are aimed at striking an interim bilateral bargain under which Mexico could win relief from some US tariffs while addressing US demands on areas including automotive content and Chinese investment.
While no formal deadline exists, officials in both countries see political benefits in reaching a deal before the November 3 elections when US President Donald Trump's Republican Party risks losing control of Congress. An accord would enable both leaders to tout a win as they face domestic political challenges.
"Time is of the essence for the Mexican government," said the Mexican source, citing concerns over a weak economy and falling credit ratings on its debt. The source added that Mexican President Claudia Sheinbaum's administration, which this week presented its 2027 budget, views a U.S. trade deal as critical to reassuring markets and investors.
A spokesperson for Mexico's economy ministry said, "There are no specific deadlines at this time," stressing the government's ongoing commitment to dialogue with Washington.
The US Trade Representative and White House did not immediately respond to a request for comment.
Mexico's push to reach a deal comes after trade talks between the United States and Canada collapsed last month, plunging the longtime allies into a bitter tariff dispute.
Washington on Tuesday banned imports of a broad swath of Canadian alcohol, motorcycles and dairy products, and Ottawa has vowed to match U.S. tariffs dollar for dollar.
The collapse of Canada's talks has reinforced Mexico's strategy of avoiding direct confrontation with Washington, betting that cooperation will yield tariff relief.
The Mexican source described the country's approach as "play nice and continue to cooperate." Mexico sends more than 80 per cent of its exports to its northern neighbor.
Reflecting the intensified pace, US Commerce Secretary Howard Lutnick met virtually with Sheinbaum on Thursday about trade.
The meeting, originally scheduled in person, came less than two weeks after Sheinbaum proposed legislation giving the government new powers to review and block foreign acquisitions of Mexican companies. — Reuters
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