Mexico and the U.S. Hold First Bilateral USMCA Round: What Changed This Week.

On April 20 and 21, U.S. Trade Representative Jamieson Greer met in Mexico City with President Claudia Sheinbaum and Economy Minister Marcelo Ebrard for the first bilateral round of the 2026 USMCA review. The tone was clearer than at any point since the review launched in March, and the message from Washington was direct. Tariffs are not going away.

The review formally begins July 1, 2026. Mexico is racing to land an early sectoral deal on steel, aluminum, and autos before the statutory decision date. The United States is holding its leverage.

What Happened This Week

The meetings in Mexico City covered priority sectors that touch nearly every cross-border manufacturer: steel and aluminum, automotive, agriculture, rules of origin, and trade policy coordination. According to reporting from Modern Diplomacy and Mexico Business News, Greer signaled that the Trump administration will not return to a zero-tariff framework, even for USMCA-compliant goods.

Current U.S. tariff exposure for Mexican exporters includes a twenty-five percent duty on imported autos and duties as high as fifty percent on steel and aluminum. The United States has also proposed raising regional content requirements for key automotive components from roughly seventy-five percent to one hundred percent, a change that would fundamentally restructure how Canadian and U.S. manufacturers source from Mexico.

Sheinbaum publicly announced on April 20 that Mexico will seek an early sectoral agreement on steel, aluminum, and automotive trade, pushing for zero-tariff treatment on products that comply with regional rules of origin. The next formal round between Greer and Ebrard is scheduled for the week of May 25 in Mexico City.

Why This Matters for Companies Entering Mexico

The strategic implications are sharper than the headlines suggest. Three things are now clear.

First, the bilateral structure of these talks tells you where Washington's attention is. The United States launched this review bilaterally rather than trilaterally. Canada's negotiations are expected to begin in May, separately. For Canadian companies evaluating Mexico as a nearshoring base, that sequencing matters. Mexico is being handled first because it carries the larger trade surplus, the deeper automotive integration, and the nonmarket inputs the U.S. wants to displace.

Second, the tariff ceiling is not coming down before July. Companies modeling Mexico operations based on pre-2024 tariff assumptions are working with a stale spreadsheet. CSIS analysts now describe clean renewal as the least likely outcome, with a painful extension scenario, where Mexico and Canada make important concessions to preserve the agreement, carrying moderate probability. Operating plans need to assume elevated tariff exposure persists into 2027.

Third, rules of origin are the real battleground. If the U.S. proposal to raise regional content requirements to one hundred percent on key automotive components moves forward, every supplier relationship built around Asian or European inputs will need to be restructured. Companies that set up in Mexico specifically to access USMCA duty-free treatment cannot assume their current bills of materials will qualify in 2027.

What Companies Should Be Doing Right Now

The companies we are speaking with, most of them Canadian manufacturers and American mid-market operators, are making three moves this quarter.

They are accelerating HS code analysis on current and planned imports into Mexico, because understanding exactly where a product sits relative to current and proposed rules of origin is the difference between a compliant supply chain and a fifty percent duty. As we covered in our analysis of HS code analysis for Mexico imports, this work is the foundation of any tariff mitigation strategy.

They are evaluating entity structures that preserve optionality. A standalone Mexican subsidiary, an IMMEX program, or a shelter arrangement each carry different exposure profiles under changed rules of origin. Companies that locked in a structure in 2022 may find themselves on the wrong side of the new regime. Our analysis of Mexico entity structure options walks through the tradeoffs.

They are engaging institutional channels. Both the Canadian Trade Commissioner Service and the U.S. Commercial Service are briefing companies in their networks on the review's trajectory. Companies that are already in dialogue with these offices are getting better information than what reaches the trade press.

The Quiet Truth

The USMCA review is not going to produce a clean renewal. It is producing a renegotiation, in stages, under pressure, with Mexico absorbing most of the adjustment. For companies that have already entered Mexico, this is a period of structural risk that requires active management. For companies that are evaluating entry, it is a period that rewards patience and preparation over speed.

The deals that survive the next twelve months will be the ones built by operators who understood that institutional clarity, partner selection, and rules-of-origin discipline matter more than the tariff headline on any given day.

if this raises questions about your own mexico strategy, we're here to talk.