US, Mexico conclude first round of trade deal talks on autos, metals, security

• Second round of talks scheduled for June 16-17 in Washington, D.C., will cover agriculture and 'level playing field' issues
• A third negotiating round is planned for the week of July 20 in Mexico City
• USMCA partner Canada has been excluded from the bilateral talks between the U.S. and Mexico

Summary

Key Development: The United States and Mexico concluded their first bilateral negotiating round on May 29 to revise the U.S.-Mexico-Canada Agreement (USMCA), focusing on automotive trade, steel and aluminum, and economic security.

Negotiating Parties: U.S. Trade Representative Jamieson Greer and Mexico's Economy Minister Marcelo Ebrard led the discussions in Mexico City.

U.S. Objectives: The USTR stated that talks aimed to reduce the U.S. trade deficit with Mexico and strengthen American supply chains—signaling concerns about current trade imbalances with its southern neighbor.

Timeline:

• Second round scheduled for June 16-17 in Washington, D.C., covering agriculture and "level playing field" issues
• Third round planned for the week of July 20 in Mexico City
• Notably, Canada has been excluded from these initial bilateral discussions despite being a USMCA partner

Market Implications: The bilateral approach and focus on deficit reduction suggest potential friction in North American trade relations. The exclusion of Canada may indicate either targeted concerns with Mexico specifically or a divide-and-conquer negotiating strategy. Industries directly affected include automotive manufacturing, steel and aluminum producers, and agricultural sectors. The emphasis on supply chain strengthening reflects ongoing U.S. efforts to reshore critical manufacturing and reduce dependencies.

Traders should monitor developments closely, particularly those with exposure to cross-border manufacturing, metals trading, and agricultural exports. Any significant changes to USMCA could impact companies with integrated North American supply chains and affect currency markets, particularly USD/MXN exchange rates.