Mexico and the United States accelerate trade talks ahead of November midterms

Negotiators from Mexico and the United States are racing to seal a provisional trade accord before the upcoming U.S. midterm elections, according to six insiders. The draft would grant Mexico relief from certain U.S. tariffs in exchange for concessions on automotive content rules and tighter scrutiny of Chinese investment. Both sides see a pre-election deal as a political win, especially as the Republican Party faces potential losses in Congress on November 3.

Mexico’s President Claudia Sheinbaum, whose government just unveiled its 2027 budget, considers the agreement crucial for restoring investor confidence amid a weak economy and falling credit ratings. The push follows Washington’s recent ban on a range of Canadian imports, which has intensified Mexico’s strategy of cooperating with the United States rather than confronting it. High-level talks have included a virtual meeting between U.S. Commerce Secretary Howard Lutnick and Sheinbaum, and discussions on aligning Mexico’s new foreign-investment screening law with U.S. expectations. Key hurdles remain, notably the Section 232 tariffs on steel, aluminum and vehicles, which could be reduced if a framework similar to the one once discussed with Canada is adopted.