Progress toward a potential trade agreement between Mexico and the US has stalled amid disagreements over reductions in Section 232 tariffs on steel, aluminum and downstream metal products, weakening expectations of an imminent deal, according to Bloomberg, citing people familiar with the discussions. Significant progress could consequently be delayed until after the November 3 US midterm elections.
Metals tariff relief remains a key obstacle
US officials, including commerce secretary Howard Lutnick, reportedly resisted Mexico's requests for lower metals duties, while a US counterproposal failed to address Mexican concerns. Mexico has sought reductions in the 50 percent tariffs on steel and aluminum, insisting that relief should also cover downstream products, although the two sides had not agreed on a reduced metals tariff rate.
Mexican officials maintain prospects for an agreement
Mexico's ambassador to the US, Roberto Lazzeri, acknowledged that Section 232 tariffs remained the main sticking point. However, economy minister Marcelo Ebrard disputed suggestions that Lutnick opposed tariff reductions.
Uncertainty weighs on investment decisions
A bilateral framework agreement would provide greater certainty for businesses delaying investment decisions amid negotiations over the US-Mexico-Canada Agreement. Mexico has also argued that differences in US sector-specific tariff treatment disadvantage its producers compared with competitors in Japan and South Korea, reinforcing its push for concessions.
