Mexico says trade pact with US will survive despite Trump's skepticism

MEXICO CITY: Amid persistent doubts over the future of the U.S.-Mexico-Canada trade pact, Mexico's Economy Minister Marcelo Ebrard insisted on Thursday that the agreement remains firmly intact and that the three countries will close a deal to extend it.

AI Brief

Mexico's Marcelo Ebrard says USMCA review is underway and progressing, despite Trump dismissing the treaty's importance.
Analysts warn talks may extend into 2026 and that Trump could politicise the process by tying trade to security and cartel-related tensions.
Even with a likely 16year extension, steep US tariffs on Mexican exports may continue to weaken the agreements economic benefits.

"We're already in the treaty review phase, and we have to finish by July 1; that's our deadline," Ebrard said during Mexican President Claudia Sheinbaum's daily morning press conference. "We have made good progress on all the points that concern each of the parties."

Ebrard's comments were his first on the topic since U.S. President Donald Trump again cast doubt on the treaty's future earlier this week.

"There's no real advantage to it, it's irrelevant," Trump said on Tuesday, as he toured a Ford factory in Dearborn, Michigan.

The trilateral trade agreement, known as USMCA, replaced the North American Free Trade Agreement in 2020 and is a backbone of Mexico's economy.

The treaty, which was negotiated during Trump's first term, requires the three countries to hold a joint review this year to extend the pact. If extended, the treaty will remain in place another 16 years. If not, it is subject to annual reviews.

Technically, July 1 is a key date in the treaty's review process, but many analysts expect negotiations to extend late into 2026 and said Trump will likely avoid extending the treaty before the U.S. midterm elections in November.

Trump's recent threats to pursue military action against cartels have also added a new layer of uncertainty to U.S.-Mexico relations.

"I think Ebrard is betting on a best-case scenario, but the window for a July successful review is closing fast," said Alexia Bautista, a former Mexican diplomat and lead Mexico analyst at the political risk consultancy firm Horizon Engage.

"Given recent events and statements, the risk is that Trump injects security into the process, turning the trade review into a far more political negotiation."

Pedro Casas, chief executive of the American Chamber of Commerce of Mexico, said he expects the U.S. will continue imposing tariffs on a wide spectrum of Mexican exports, regardless of the treaty's future.

The Trump administration has imposed sweeping 50% duties on steel and aluminum exports to the U.S., along with a 25% tariff on cars shipped from Mexico, even when those vehicles comply with the terms of the trade deal.

"I think the most likely scenario is a positive review process where we agree to extend the treaty for another 16 years, but steep tariffs still remain on Mexican exports that undermine the strength of the agreement," Casas said.