The Inter-American Dialogue’s Mexico Program convened the third session of its U.S.–Mexico High-Level Dialogue Series, bringing together senior stakeholders from government, the private sector, and the expert community for a candid, off-the-record discussion on trade, tariffs, and the future of the USMCA ahead of the agreement’s 2026 review. Held under the Chatham House Rule, the session explored the strategic, technical, and political dimensions of a relationship that remains deeply integrated despite significant bilateral tension.
Participants opened with a point of consensus: Regardless of the outcome of the USMCA review, geographic proximity and economic integration are durable realities. Mexico will continue to receive preferential treatment compared to other global trading partners, and the North American region will remain among the most integrated in the world. At the same time, participants acknowledged that Mexico faces a structural challenge—roughly 39 percent of its GDP depends on trade, and approximately 80 percent of that trade flows to the United States—making a stable, forward-looking bilateral trade framework an economic and strategic imperative.
A recurring theme was that the underlying driver of current tariff pressure is not a coherent U.S. industrial policy but rather the absence of one. Several participants argued that tariffs are being used as a substitute for a strategy to reshore production to the United States, and that this creates both risk and opportunity for Mexico. The more pressing challenge, participants suggested, is not any single tariff measure but the policy vacuum itself—one that makes outcomes unpredictable and planning difficult for firms operating across the region.
On the USMCA review process, participants were broadly skeptical that a formal conclusion would be reached by the July 1 deadline, citing bandwidth constraints at USTR and the complexity of simultaneous trade negotiations. However, several noted that missing the deadline is not inherently damaging if a credible agenda and a sense of continuity are maintained. What matters most is ensuring that any emerging framework—whether through a formal amendment or parallel agreements—avoids locking in tariffs as a permanent feature of the bilateral relationship.
Mexico’s negotiating strategy was discussed at length. Participants emphasized the importance of a nuanced, issue-by-issue approach: cooperating where possible, converging on shared interests, and pushing back where necessary. Specific sectors flagged as high-priority areas for the United States—semiconductors, pharmaceuticals, electronics, and critical minerals—were seen as potential areas for productive bilateral engagement. Participants also noted that Mexico has already taken steps to address technical concerns raised by the United States, though coordination and messaging remain areas for improvement.
A significant portion of the discussion focused on the role of data and the private sector. Participants noted that the United States is asking a pointed question: how does the USMCA support American jobs, and what are the numbers? The data exists, but there is no coordinated effort to deliver it coherently. Several participants called for greater alignment among Mexican private sector representatives traveling to Washington, urging a unified strategy and shared messaging rather than fragmented outreach.
The question of Canada was raised as a structural risk. Participants noted that while U.S.–Mexico technical engagement has been productive, the U.S.-Canada relationship is more fraught. A scenario in which the United States concludes a bilateral amendment with Mexico but not Canada could result in a technically trilateral agreement that functions as two separate bilateral frameworks in practice—an outcome participants agreed would undermine the coherence and predictability that firms and investors depend on. Clearing the political hurdle with Canada was seen as essential to preserving the integrity of the agreement’s architecture.
The roundtable concluded with broad agreement that the near-term priority for Mexico is anchoring certainty for investors, for firms with supply chain exposure, and for the bilateral relationship itself. Participants acknowledged that the outcome of the review process will likely be a less expansive agreement than either NAFTA or the current USMCA, and may include parallel agreements and codified tariff schedules. Even so, most agreed that some form of agreement is inevitable, and that Mexico’s greatest leverage lies in being proactive, technically prepared, and strategically aligned with U.S. priorities across sectors.
This event was by invitation only.
