Trade agreement between the U.S. and Mexico extended for 90 more days on land disputes.
Mexico and U.S. Extend Trade Deal for 90 Days
President Claudia Sheinbaum of Mexico and President Donald Trump of the United States have agreed to extend their existing trade deal for 90 days. This decision was announced by President Sheinbaum on her Facebook page.
The extension aims to facilitate long-term negotiations for a new trade agreement between the two countries. The ongoing negotiations are part of the Trump administration's global "reciprocal" tariff policy.
The current trade deal, which maintains tariffs at 25% on various Mexican goods, including fentanyl-related products, cars, steel, aluminum, and copper, will continue for the next 90 days. This extension prevents a 30% tariff levy on Mexico, which was set to start on Friday.
Historically, Mexico has been the United States' largest trading partner. In 2024, U.S.-Mexico trade reached a record-breaking $840 billion. Trade between the two countries is significant, especially for states like Texas, which conducted $281 billion in trade with Mexico in 2024 alone.
The long-standing trade relationship is structured by the United States-Mexico-Canada Agreement (USMCA), which was initially negotiated to eliminate trade barriers and equalize labor and manufacturing sectors among the three countries. However, trade tensions resurged during President Trump's second term, leading to the imposition of tariffs.
Potential impacts of a protracted trade dispute or tariff increases are substantial. Economically, higher tariffs could disrupt supply chains, increase costs for U.S. importers and consumers, especially in border states like Texas, and ripple through industries heavily integrated across Mexico and the U.S., such as agriculture and manufacturing.
On the other hand, a successful long-term trade agreement could stabilize cross-border commerce, ensure tariff predictability, and promote supply chain security, benefiting both economies that are intricately linked through complex manufacturing and agricultural partnerships.
The complexities of the trade deal negotiations are attributed to the issues and assets associated with the U.S.-Mexico border. The agreement pertains to goods traded between the U.S. and Mexico and is a temporary measure while long-term negotiations are underway. Both countries appear committed to dialogue to avoid tariff escalations that would harm their substantial bilateral trade relationship.
[1] Sheinbaum, C. (2025). Facebook post. [2] Trump, D. (2025). Truth Social post. [3] Smith, J. (2025). The Impacts of U.S.-Mexico Tariffs: An Economic Analysis. The Brookings Institution.
The extension of the trade deal between Mexico and the U.S. could significantly impact various sectors of business, as a successful agreement might promote supply chain security and benefit industries that are heavily integrated across both countries. On the contrary, ongoing trade tensions or increased tariffs, such as the proposed 30% levy on Mexico, could disrupt supply chains, increase costs for businesses, and have substantial political and financial repercussions. As the extension coincides with President Trump's global "reciprocal" tariff policy and long-term negotiations for a new agreement, the role of politics in shaping the financial dynamics of the industry remains evident. In light of the ongoing discussions, the involvement of finance in mediating the negotiations becomes crucial, while general news outlets continue to closely monitor the development of the trade deal.
