Mexico, US Set Fourth Round of USMCA Review Talks for September

Mexico and the United States will hold a fourth round of USMCA review negotiations in Washington in early September 2026, after failing to resolve key disputes over automotive rules of origin and Section 232 tariffs during the third round. The main sticking point is Washington's demand for 50% US-specific content in vehicles, which Mexico rejects as a precedent that could tighten further, while Mexico seeks relief from 25% auto and 50% steel/aluminum tariffs before advancing other issues. The outcome will directly affect automotive manufacturers, steel and aluminum exporters, and cross-border supply chains as the review, already past its original July 1, 2026 deadline, risks extending into 2027.

Mexico and the United States will hold a fourth round of USMCA review negotiations in Washington in early September, Economy Minister Marcelo Ebrard announced, following a week of talks aimed at narrowing differences on the treaty's most sensitive issues. The announcement came after US Trade Representative Jamieson Greer met this week with President Claudia Sheinbaum and Ebrard as part of the third round of the process.

According to a statement from Mexico's Economy Ministry, this week's talks were "constructive" and produced progress on steel, aluminum and the substitution of imports from Asia. Still, two sources familiar with the negotiations told Reuters, speaking on condition of anonymity, that the two governments remain far apart on key issues, starting with Washington's demand that vehicles contain 50% US-made components to qualify for preferential access. 

One source indicated Mexico will not budge on this front at all, not even a token 1% carve-out for country-specific content, out of concern that any opening, however small, would invite Washington to keep raising the bar and would establish an unwelcome template for future talks.

The existing rules require three-quarters of a vehicle's content to originate in North America, along with a labor-value provision stipulating that 40% of production come from plants paying workers a minimum of US$16 hourly, a bar that, in practice, only US and Canadian facilities clear. Notably, the agreement stops short of assigning any single member country its own dedicated content share. 

In parallel, Mexico is asking Washington to adjust Section 232 national-security tariffs, which currently apply a 25% duty on automobiles and 50% on steel and aluminum from Mexico and Canada, as a precondition for progress on other fronts. So far, President Donald Trump has shown no sign of easing those tariffs.

An Eight-Month Process That Could Stretch Into 2027

September's round adds to a negotiating calendar that formally kicked off in March. As Mexico Business News reported at the time, Mexico and the United States set March 16 as the start date for the first preparatory bilateral round, after Ebrard and Greer agreed to formally launch the review process. That initial meeting followed a December 2025 announcement from Canada that trilateral talks would begin in January, with an original goal of concluding before July 1, 2026.

That deadline has since passed without resolution. In April, the US government itself projected that the review would extend beyond July 1, at a time when Mexico had already imposed tariffs on 1,400 Chinese-origin products and was working through 52 trade demands raised by Washington, part of a strategy to position itself as the United States' preferred regional partner, Under Article 34.7 of the treaty, if the three countries fail to reach consensus to extend the agreement by another 16 years, they must enter a decade-long cycle of annual reviews before the USMCA ultimately expires.

Canada, for its part, has taken a different track: while participating in the trilateral review, it is simultaneously negotiating bilateral agreements with Washington to resolve tariffs on steel, aluminum and autos, without that process replacing the USMCA framework, Canadian Minister Dominic LeBlanc explained in remarks. The backdrop hardened further with Washington's decision to hit a broad range of Canadian goods with a 50% tariff under an obscure 1930s trade-discrimination statute, applied even to products that meet the agreement's content rules.

Energy Remains Another Open Front Ahead of September

Beyond auto content rules, energy is shaping up as another deep-seated point of friction in the review. The United States and Canada are demanding nondiscriminatory access to Mexico's electricity market, even as the Sheinbaum administration defends constitutional reforms that grant priority grid dispatch to the CFE and guarantee the state a minimum 54% stake in private and renewable power generation, according to an analysis by Mexico Business News. 

The same analysis warns that the most likely scenario is a "painful" extension of negotiations into late 2026 or beyond, concentrated in autos, energy, China-related disciplines and enforcement mechanisms, with uncertainty already showing up in the data through a roughly 10% year-over-year drop in investment in Mexico.

With the fourth round now set for September, negotiating teams face the challenge of resolving in a matter of weeks differences that have gone unsettled for months. Ambassador Greer told the US Senate he expects to reach interim trade arrangements with Mexico and Canada this year, leaving the more complex changes to the treaty for 2027, while analysts such as former US Congressman Kevin Brady maintain that, despite the slow pace, "every round of negotiations adds value" and the talks "are not in bad shape."