Report: US-Mexico Trade Deal in Doubt as Commerce Secretary Opposes Major Tariff Cuts

By Staff, Agencies

Prospects for a trade agreement between the United States and Mexico have weakened after US Commerce Secretary Howard Lutnick opposed significant reductions in tariffs on Mexican automobiles, steel and aluminum, The Wall Street Journal reported Thursday.

Citing people familiar with the negotiations, the newspaper reported that Washington and Mexico City had been moving toward an agreement that would reduce US tariffs on these products in exchange for concessions from the Mexican government.

The proposed deal could have opened the way for broader negotiations on renewing the United States-Mexico-Canada Agreement [USMCA], which governs trade among the three North American countries.

Mexican officials and numerous corporate executives had expressed optimism that an agreement was within reach. However, progress reportedly slowed in recent days amid disagreements over tariffs administered by the US Commerce Department under Lutnick’s leadership.

According to people familiar with the discussions cited by the Journal, Lutnick opposed substantial reductions to US tariffs of 25% on Mexican automobiles and 50% on steel and aluminum imports.

He also resisted proposals to lower duties on derivative products, referring to finished goods manufactured using steel and aluminum.

Domestic aluminum producers had raised concerns that reducing the tariffs would undermine US manufacturers and threaten American jobs, adding to opposition against easing the trade restrictions.

The tariffs on automobiles, steel and aluminum were imposed by the United States on national security grounds and are administered by the Commerce Department.

The reported disagreement threatens to complicate efforts to reach a broader trade understanding between Washington and Mexico City, potentially delaying discussions over the future of the USMCA and the trade relationship between the two countries.