U.S.-Mexico trade negotiations have stalled over steel and aluminum tariffs after Washington rejected Mexican demands for relief, according to people familiar with the matter. Mexico is seeking to lower the 50% metals duties and cut light-vehicle tariffs to 15% from 25%, citing investment uncertainty and disadvantages against Japan and Korea. Commerce Secretary Howard Lutnick's counterproposal failed to address Mexican concerns, and U.S. officials are now comfortable delaying major progress until after the Nov. 3 midterm elections. President Donald Trump and President Claudia Sheinbaum have both voiced optimism, but Ambassador Roberto Lazzeri said the two sides remain stuck on the Section 232 tariffs.
According to Transport Topics, U.S. and Mexican trade negotiators have reached an impasse over tariffs on steel and aluminum, dimming earlier hopes for an imminent deal and likely pushing major progress past the Nov. 3 midterm elections, according to people familiar with the matter.
Metals duties emerge as the central obstacle
Talks cooled in recent days after U.S. officials, including Commerce Secretary Howard Lutnick, objected to Mexican demands for reduced tariffs on metals, two people said, asking not to be identified discussing private deliberations. The dispute centers on the Section 232 duties, which include a 50% import tax on steel and aluminum and a 25% import tax on non-U.S. content in USMCA-compliant cars.
One sticking point involves lowering tariffs on derivative metals products. Duties on downstream goods made from steel and aluminum now cover a substantial part of Mexico’s economy, and Mexican leaders have said they would not accept a deal without relief on that front. A counterproposal from Lutnick failed to address those concerns, the people said, and the two sides have since remained apart.
Mexico’s economy leans heavily on trade with the U.S., with more than 80% of its exports headed to its northern neighbor. The government has pushed for a deal that would cut U.S. tariffs on light vehicles to 15% from the current 25%, according to other officials who also asked not to be identified. The proposed agreement also included a reduction in the 50% steel and aluminum tariffs, though the two sides had not settled on a new rate.
Lutnick’s role draws scrutiny as Washington weighs delay
Lutnick has sought more influence over the talks and broader trade policy after taking a back seat to U.S. Trade Representative Jamieson Greer, whose office earlier led the negotiations, according to the people. Lutnick met virtually with Mexican President Claudia Sheinbaum on Sept. 9. The White House and Commerce Department did not respond to requests for comment.
U.S. officials have grown comfortable with the idea of pushing a potential deal well beyond the Nov. 3 midterm elections. Mexico’s ambassador to the U.S., Roberto Lazzeri, acknowledged the difficulty during an Oct. 19 panel in Miami, and The Wall Street Journal first reported the impasse.
“We’re a little bit stuck on the details. I think the sticking point is the 232 tariffs.” — Roberto Lazzeri, Mexico’s ambassador to the U.S.
Mexican Economy Minister Marcelo Ebrard, the country’s lead negotiator, rejected the suggestion that Lutnick was blocking a potential deal. Ebrard told reporters late last week that in his most recent conversation with Lutnick, he did not get the impression that the commerce secretary opposed reducing the tariffs, at least as far as he knew.
Leaders strike optimistic tone despite unresolved details
The disagreements echo those that caused the breakdown of U.S. and Canada talks in August, which was largely driven by Lutnick’s opposition to proposed concessions on industry-specific Section 232 tariffs falling under the Commerce Department’s jurisdiction.
Mexican officials have argued that industry-specific tariff rates give other countries, including Japan and Korea, an upper hand. A framework agreement would provide stability and certainty to business leaders who are stalling investment decisions amid rolling negotiations over renewing the U.S.-Mexico-Canada trade deal.
Earlier this week, President Donald Trump and Sheinbaum each struck a positive note on the prospects for a deal without offering specifics. Trump told a political rally in Kansas on Oct. 19 that the U.S. and Mexico were close to a trade agreement, while Mexico’s leader told reporters Oct. 20 that there had been progress toward making “the best possible” deal.
Following a Senate hearing Oct. 20, Ebrard said he was encouraged by Trump’s remarks and would follow up with his U.S. counterparts “to see what progress has been made.”
Source: Transport Topics
Compiled from international media by the SCI.AI editorial team.
