Mexico Ramps Up Efforts to Safeguard Regional Trade Pact Amid U.S. Tensions

Mexico is intensifying efforts to protect its trade agreement with the United States and Canada, as it navigates escalating tensions over tariffs and broader geopolitical issues. Luis Rosendo Gutierrez, Mexico's deputy economy minister, emphasized the country’s commitment to addressing key concerns in a recent interview with Inside U.S. Trade.

The trade landscape among the three North American partners has grown increasingly strained after former U.S. President Donald Trump issued tariff threats tied to Mexico’s handling of drug trafficking and migration. In response, Mexico has taken significant steps to address these concerns, ensuring its readiness for trade negotiations without hindrance.

“We are actively working on these issues to engage in negotiations without obstacles,” Gutierrez stated. Recent measures include a crackdown on contraband goods entering from Asia and record seizures of fentanyl. Mexican authorities have also detained thousands of migrants in an effort to curb northbound flows.

Current U.S. President Joe Biden expressed appreciation for Mexico’s efforts in a statement on Friday, acknowledging the seizure of over 20 million doses of illicit fentanyl and commending Mexican President Claudia Sheinbaum, along with the nation’s military and law enforcement.

Gutierrez revealed that Mexico has maintained contact with Trump allies, including Jamieson Greer, Trump's designated trade representative, while discussions with officials from the Biden administration have been limited.

Despite progress, Mexico faces criticism from U.S. officials and industry leaders who allege that the country serves as a “backdoor” for Chinese goods and investments—a claim Mexico strongly denies.

Gutierrez indicated that Mexico is considering adopting investment screening measures akin to the U.S. Committee on Foreign Investment. This move aims to bolster transparency and align with regional trade partners’ standards.

When questioned about Chinese automaker BYD’s plans to establish a factory in Mexico, Gutierrez affirmed that the country aims to uphold the same trade rules as its allies. Trump had previously threatened a 100% tariff on cars produced at the proposed plant, although BYD maintains the factory will primarily serve the local market.

To strengthen its manufacturing appeal, Mexico is exploring new incentives aimed at attracting investments in key industries. Gutierrez noted the potential for Mexico to produce components, such as batteries, that align with U.S. demands for regionally manufactured goods.

Mexico is also bracing for the outcome of a USMCA dispute panel regarding its restrictions on genetically modified (GM) corn imports. While Gutierrez affirmed that Mexico would comply with the panel’s ruling even if unfavorable, he acknowledged the possibility of revisiting proposed constitutional reforms that would restrict GM corn usage for human consumption.

As Mexico addresses these multifaceted challenges, its leaders remain focused on safeguarding the integrity of the USMCA trade agreement and ensuring long-term stability in its economic partnerships. By tackling key issues head-on and aligning its policies with regional allies, Mexico aims to solidify its position in the evolving North American trade framework.