MediumI Geo-Economics & Chokepoints21 September 2026, Monday
Sheinbaum: Mexico will buy more from the United States and cut Chinese imports for the sake of the USMCA
At her press conference on 21 September Sheinbaum said the United States wants its trade deficit reduced and that purchases would be shifted towards the United States; Mexico applies tariffs of up to 50% to countries without a free trade agreement.
At her daily press conference on 21 September 2026, Mexican President Claudia Sheinbaum announced that, in the face of pressure from Washington, purchases from the United States would be increased and imports from other countries reduced. Sheinbaum said the United States wants its so-called trade deficit reduced. At the start of 2026 Mexico had begun applying tariffs of up to 50% to countries without a free trade agreement, China included; the scope covers cars, automotive parts, textiles, steel and white goods. The review of the USMCA began in March 2026 and the process is focused on reducing dependence on imports from outside North America and strengthening regional supply chains.
On the US side, tariffs of 50% already apply to steel and aluminium and 25% to cars and automotive parts that do not meet USMCA rules; Mexico wants these rates lowered. The US administration refused on 1 July 2026 to renew the agreement in its present form, but the USMCA remains in force through annual reviews until 2036. Canada walked away from the talks in August while Mexico stayed at the table. Sheinbaum said she held her 22nd telephone call with Donald Trump on 18 September and that some understandings had emerged from it; she did not share details pending a final agreement. The same day the peso traded around 17.15 to the dollar, its weakest level in about a month.
The calendar is tight: a negotiating round led by US Trade Representative Jamieson Greer and Mexican Economy Minister Marcelo Ebrard will be held in Washington on 28 September, while the Bank of Mexico's rate decision is due on 24 September. Mexico's move turns the tariff into not merely an instrument of protection but a bargaining card offered to the United States at the USMCA table.
Talay assessment
Bottom line
Mexico is using its tariffs of up to 50% on China not as a concession at the USMCA table but as an item for exchange: in return for a pledge to curb Chinese imports it wants the US tariffs of 50% on steel and aluminium and 25% on automotive goods reduced. With Canada having left the table in August, Mexico being the sole interlocutor both increases its bargaining power and makes it more exposed. The most likely path is a partial, sector-specific understanding.
Likely effects
- The North American supply chainUncertain1–6 months
Tariffs of up to 50% becoming entrenched in cars, automotive parts, textiles and steel raise costs for producers using Chinese intermediate goods and accelerate sourcing within the region.
- The peso and Mexican monetary policyNegativeWeeks
The peso weakening to around 17.15, its softest level in a month, ahead of the Banxico decision on 24 September and the Washington round on 28 September shows how far negotiation news is driving the currency.
- Türkiye's export competitivenessUncertain1–6 months
Mexico applying tariffs of up to 50% to Chinese textiles and steel could create a relative price advantage for exports of Turkish origin in the same product groups; but Mexico's preference for sourcing from the United States limits that space.
- China's position in the regionNegative6 months+
The review begun in March 2026, with its focus on reducing dependence on imports from outside North America, narrows China's indirect access to the US market through Mexico.
Possibilities, ranked
- 1A partial, sector-specific understanding50%
The 28 September round produces a narrow agreement involving quotas or reduced tariffs in steel and aluminium or in automotive goods; the USMCA continues under its annual review arrangement.
Watch: A joint Greer-Ebrard statement after the 28 September Washington round and any change in the 50% steel and aluminium rate
- 2The negotiation drags on35%
The parties fail to agree on the size of the trade deficit and on rules of origin; existing tariffs are maintained and the matter slips to the 2027 review round.
Watch: No concrete outcome from the end-September round and the announcement of a new negotiating calendar
- 3Escalating tension15%
Washington turns to threats of further tariffs or Mexico withdraws its tariffs on China; the sustainability of the USMCA is thrown open and pressure on the peso increases.
Watch: A new US tariff announcement or a narrowing of scope in Mexico's tariff decree
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Dollar/peso▲ 17.15
- US steel-aluminium tariff▼ 50%
- Mexican non-FTA tariff▲ up to 50%