WASHINGTON, September 18, 2026 – Washington and Mexico City are sprinting toward an interim trade pact with under eight weeks to go before the U.S. midterm elections.
Not an easy task, that one. Even though the Mexican government insists that there’s no specific deadline for the deal, diplomats working on both sides of the Rio Grande understand perfectly well how short on time they are. For US President Donald Trump, it is an important victory in terms of his tough approach to tariffs. For Mexican President Claudia Sheinbaum, it provides her with an indispensable shield from market fluctuations. The economy of Mexico is in trouble, and there is genuine fear of credit ratings being downgraded in Mexico City in case export routes are shut down.
This pressure is quite justified considering the figures. More than 80% of all goods produced in Mexico are exported directly to the USA.
The situation became critical after the breakdown of cross-border negotiations in Washington and Ottawa, which led to the start of a cruel tariff war between two old friends. Learning lessons from Canada’s experience of being involved in such an unpleasant struggle, Mexico chose a more intelligent approach – cooperation instead of open fight.
“We both want to reach a deal before the midterms,” a Mexico-based negotiator admitted to Reporters, pointing out that Mexico’s room to maneuver is rapidly shrinking.
However, Sheinbaum is not going into this blind. The two countries are determined to ensure that the trilateral USMCA survives, but the Mexican government does not have to give up on their economy in order to fix the relationship between the United States and Canada.
The key problem continues to be the security tariffs under Section 232, where Mexican steel products suffer from a 50% duty and auto products from cross-border trade from 25%. These taxes are paralyzing the entire chain and making manufacturing operations costly for both parties. It will be interesting to see whether a compromise will be reached before the voting takes place.
