Trump Says Mexico Tariff Deal Near, 23 Oct

The possible deal concerns US tariffs on Mexican steel, aluminium and cars. President Donald Trump said on 23 October that the United States was “very close” to an agreement. President Claudia Sheinbaum had used similar words on 20 October. Mexico wants the tariffs reduced, while Washington is seeking terms it considers favorable.

The talks work through offers and requested actions. Sheinbaum said the United States proposes reducing a tariff by a certain amount and asks Mexico for steps in return. Some of those points remain unresolved. Mexico says it will not accept measures that violate its constitution, laws, economy or jobs.

The talks are active, but the current tariffs remain. Economy Secretary Marcelo Ebrard was in Washington on Friday to continue discussions. Until negotiators publish a final text and set a signing date, the reported statements do not change the tariff rates or create a new agreement.

A tariff is a government tax charged when goods cross a border. The importer generally pays it, which can raise the cost of foreign goods in the destination market. Tariffs can therefore affect factories, builders, car companies and shoppers, even when the tax is collected from an importing business.

The current US measures apply a 50% tariff to Mexican steel and aluminium and a 25% tariff to Mexican cars, with some exceptions. For example, a shipment of Mexican steel valued at US$1 million would face a US$500,000 tariff at the stated rate, before considering any exception or other rule. The tax applies when the goods enter the United States.

These rates remain unchanged because no replacement agreement has been published. Mexico is seeking rates of 15% or less, according to the article’s account of negotiations. The final rates, exceptions and any implementation date are still unknown.

US-Mexico goods trade is large enough that even a narrow tariff change can affect factories, suppliers, builders and consumers. In 2025, the United States sold Mexico US$337.3 billion in goods and bought US$534.3 billion. Together, those flows totaled US$871.6 billion in goods trade.

The difference between US purchases and sales was US$197.0 billion. In simple terms, the United States imported US$197.0 billion more in goods from Mexico than it exported there during 2025. The article identifies this as the US goods trade deficit with Mexico. It does not provide a separate services figure.

That scale explains why negotiations matter beyond diplomats. Mexico’s exports include goods affected by the 50% metals tariffs and 25% car tariff. Any agreement could change costs across a very large commercial relationship. For now, no tariff changes have been announced, so the existing rules remain in place.

Unchanged tariffs keep a tax on goods that US factories, builders and car buyers rely on. That can make Mexican steel, aluminium and cars more expensive for US importers. Businesses may then face tighter margins, higher input costs or difficult sourcing decisions. The article describes these stakes as practical for US readers.

A US carmaker using Mexican parts or vehicles could continue operating under the 25% car tariff. A builder or steel buyer could keep paying costs linked to the 50% metals tariff. Some of those costs may be absorbed by companies, passed through supply chains or reflected in prices, but the article gives no estimate of how much consumers would pay.

Until a text appears, nothing changes legally or commercially. The tariffs remain at their current rates, subject to stated exceptions. A successful deal could lower costs if it reduces the rates, but the final terms, coverage and timing remain unknown.

Mexico’s main goal is lower access costs for its exports. According to the article’s summary of a Wall Street Journal report, Mexico is seeking tariffs of 15% or less, matching the rates Japanese and South Korean cars pay today. It also wants a rebate system that counts parts made in all three USMCA countries.

The negotiating mechanism is an exchange of tariff reductions for Mexican steps. Sheinbaum said Washington proposes reducing a tariff by a certain amount and asks Mexico for a list of actions. The article does not publish that list. Mexico says it will not negotiate anything outside its constitution and laws or anything that harms the national economy or jobs.

The remaining concessions are therefore unclear. The two sides have reported progress, but no final agreement exists. Ebrard said Mexico expected a good answer before the end of 2026, while the tariff rates, Mexican commitments and signing date remain open.

USMCA is the 2020 trade agreement between the United States, Mexico and Canada. It is called T-MEC in Mexico. In general, qualifying goods can receive preferential or tariff-free treatment when they meet the agreement’s requirements. The pact matters because it provides the basic framework for much of North American trade.

The article says about 80% of Mexican exports to the United States already enter without tariffs. It also says the three countries are reviewing USMCA now. Mexico’s requested rebate system would count parts made in all three USMCA countries, linking the negotiations to regional supply chains.

The article does not identify which Mexican steel, aluminium or cars qualify under USMCA, nor explain how the current tariffs override or interact with specific agreement rules. What is clear is that many Mexican exports already enter tariff-free, while the disputed tariffs still affect important goods. The review and tariff talks could alter that balance.

A country has a goods trade deficit when the value of its imports exceeds the value of its exports. The United States bought US$534.3 billion in goods from Mexico in 2025 and sold US$337.3 billion, producing a US$197.0 billion deficit. This measures trade flows, not a country’s total wealth or living standard.

A deficit can arise because consumers and companies demand foreign products, businesses use imported inputs, or a country has strong investment and spending. Mexico may sell more goods to the United States while American firms sell services or invest abroad; those broader flows are not included in the article’s goods figure. A tariff may reduce imports, but it can also raise costs for US users.

Therefore, reducing the deficit does not automatically make the United States richer. It could help some US producers, but higher input prices or weaker trade can hurt others. Trump wants a “big” deal to cut the deficit, while the article gives no evidence that a smaller deficit alone would improve overall prosperity.