MediumI Geo-Economics & Chokepoints12 October 2026, Monday
Sheinbaum says there is no trade deal with the US yet
Mexican President Sheinbaum said on 12 October that the USMCA remains in force but there is no final agreement with the US. Mexico and Canada want the pact extended for 16 years, while the US is proposing 10 years with annual reviews.
At her morning press conference, Sheinbaum said Trump's suggestion at a 10 October rally of separate negotiations with Mexico and Canada did not end the agreement, as the text had been ratified by all three countries' legislatures. According to the Rio Times, the first joint review of the pact, which entered into force on 1 July 2020, began on 1 July 2026. Sheinbaum said Mexico and Canada want a 16-year extension, while Washington is proposing 10 years with annual reviews and rejects 16.
Mexico's priorities are lower US tariffs on cars, steel and aluminium, and no new tariffs while the review is under way. According to Sheinbaum's statement in June, tariffs stood at 50% on steel and aluminium and 25% on cars. Crónica reports Sheinbaum as saying there had been progress but no final agreement. On 9 October the peso posted its weakest close since November 2025, at about 18.41 to the dollar.
The Rio Times notes that the quotes could not be checked against an official presidential transcript. The terms proposed by Mexico and the US also come from Sheinbaum's 12 October remarks rather than from any official negotiating document. No confirming statement from the US side could be found as of 12 October.
Talay assessment
Bottom line
Washington is seeking leverage by splitting a trilateral pact into two bilateral negotiations, and is using the run-up to the midterms to its advantage. Mexico's constraint is that its exports depend on the US and the 50% steel tariff bites without waiting for the review to end. The most likely path is that the agreement survives in form while tariffs are carried into year-end as bargaining chips.
Likely effects
- Mexican pesoNegativeWeeks
Uncertainty pushed the peso on 9 October to 18.41, its weakest since November 2025; pressure persists if a settlement is delayed.
- North American auto supply chainNegative1–6 months
The 25% car tariff and the proposal of 10 years plus annual reviews make it harder for investors to anchor Mexican plant decisions to durable rules.
- Turkish automotive exportsUncertain1–6 months
While rules remain uncertain in North America, competition in the European market comes from China rather than Mexico; the direct impact on Türkiye is limited.
Possibilities, ranked
- 1Talks slide past the midterms55%
Both sides announce progress, tariffs stay in place, and the final decision is left until after November.
Watch: The USTR's schedule for bilateral talks with Mexico
- 2Partial tariff cut30%
The US lowers tariffs on steel or cars in exchange for quotas, and Mexico accepts a 10-year extension.
Watch: A White House announcement of quotas or tariff changes on Mexican steel
- 3US starts withdrawal process15%
Trump sends notice of withdrawal from the trilateral pact, and the peso and Mexican assets react sharply.
Watch: Formal written US notice of withdrawal from the USMCA
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Peso per dollar (9 Oct)▼ 18.41
- US steel and aluminium tariff▼ 50%