Mexican officials, speaking anonymously because they are not authorized to brief publicly, say they are increasingly confident about a pact with Washington that trims tariffs on light vehicles, steel and aluminum. They also emphasized this is still in flux, noting a deal is not yet finalized. President Donald Trump has shifted course late in negotiations before, and a near-agreement with Canada fell apart in August at the last minute, a reminder of how fragile these talks can be.
Mexico is pressing for better terms than what Canada was offered last month. The latest negotiating round that was slated for this week was delayed, but, speaking last week, Foreign Minister Roberto Velasco said he is "cautiously optimistic" new talks can land a deal. A spokesperson for Mexico's Economy Ministry called them "constructive talks" with no deadlines set. The White House and the Office of the US Trade Representative did not respond to requests for comment.
Under the potential framework, the US levy on light vehicles would move down to 15% from 25%. Because the full rate hits only the non US content, Mexican officials estimate the real-world impact would be roughly 10% to 12%. For context, Canada was offered by the US a 15% headline rate that could effectively decline to about 7% once the maximum discount for regional content is applied.
Officials also see room to reduce US tariffs on steel and aluminum, which are currently as high as 50%, though they said the exact scale of any cut remains to be determined. Mexico has sought either a freeze or reduction of US tariffs since Trump rolled out sweeping duties early last year, and the urgency climbed in June when he said he would not reauthorize the USMCA, kicking off extended talks over rules for autos and other major industries.
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A deal would relieve months of uncertainty for President Claudia Sheinbaum's government, where questions over US trade ties have damped business confidence and private investment. Sheinbaum has overseen sluggish growth and falling private investment while urging patience as negotiators push for tariff relief.
Trade with the US is Mexico's backbone: more than 80% of Mexican exports go north, and supply chains for autos, electronics and more are tightly integrated across the border. Lower car tariffs would be especially meaningful for Mexico's auto industry, which employs roughly 800,000 people. Most vehicles built in Mexico go to the US, and for the US, Mexico is the leading source of auto parts. Steel and aluminum makers face similar stakes since the US is their main market.
Carmakers are watching closely. Ford CEO Jim Farley said Wednesday in Detroit, "We're really hopeful that they find a deal with Mexico and Canada as soon as possible," calling it "a great bridge to USMCA." He added, "We have to find a solution for this. And I'm very optimistic that everyone knows how important this is."
For your wallet, the upshot is simple: where these tariffs land and when they change will flow into costs for carmakers, metals producers and any company plugged into North American supply chains. If you hold businesses that build in Mexico or depend on cross border parts, this is worth tracking.
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