President Donald Trump and Mexican President Claudia Sheinbaum spoke by phone on Wednesday, with officials from both governments confirming that trade negotiations are moving forward as businesses on both sides of the border push for relief from tariffs that have reshaped North American commerce since July. Sheinbaum called it "a very good call" at her Friday briefing and said the possibility of an agreement is advancing well.
The talks target US duties that currently stand at 50 percent on Mexican steel and aluminum, 25 percent on cars and auto parts that don't qualify under the USMCA, and additional levies on goods failing the agreement's origin rules. A restructuring in April and June 2026 softened part of this framework, allowing USMCA-qualifying goods to pay the metals duty only on their non-US content. That's provided some breathing room for manufacturers, but the broader tariff structure remains in place.
The Negotiating Timeline
The fourth formal round of talks is scheduled for September 28-29 in Washington, one week later than originally planned. US Trade Representative Jamieson Greer leads the American delegation, while Economy Secretary Marcelo Ebrard represents Mexico City. US Commerce Secretary Howard Lutnick traveled to Mexico earlier this month as negotiations accelerated. Three formal rounds have already taken place since July.
The United States declined to renew the USMCA in its current form on July 1, 2026, moving the agreement into annual reviews that can run through 2036. Reuters reported on September 11 that both sides want a framework in place before the US midterm elections in November, a timeline that adds political urgency to the economic stakes.
At her Thursday press conference, Sheinbaum pushed back on US pressure. "I would like to see a report on what the United States government does inside the United States," she said. "We in Mexico are acting. But what happens on the other side?"
Mexico's Digital Payments Push
Mexico's Digital Economy Law for Digital and Electronic Payments was sent to Congress on September 8 and published in the parliamentary gazette the same day. The bill would authorize the finance ministry to designate sectors where accepting digital payment becomes compulsory. Public sector entities would be required to accept digital payments from the outset.
After approval, the finance ministry would have fifteen working days to name the first sectors, and sector regulators would then set their own timelines. The bill doesn't reform CoDi or DiMo, Mexico's existing instant payment platforms. It brings the digital population registry into the financial system as a trust mechanism, and the central bank gains new duties on digitalization and financial inclusion.
Mexico still runs heavily on cash. The policy logic behind the bill assumes that acceptance drives usage rather than the other way around. Brazilian officials offer the comparison Mexican policymakers cite most often, with that country's instant payment system moving from launch to near-universal use in about four years because acceptance came first.
Investment Arbitration Surge
A separate set of figures from the United Nations trade and development body put Mexico among the most-sued states in investment arbitration. Mexico tied with Ukraine for the most new investor-state cases in 2025, at five each, and tied with Russia in 2024, at four each. In 2023 it faced ten disputes.
The Mexican government acknowledged 23 active investor-state arbitrations as of June 30, along with two suspended, three discontinued, four annulment proceedings and one enforcement action. Critical minerals and energy account for the bulk of them. Fifty-six investment arbitrations were initiated worldwide in 2025, and about 80 percent were brought against developing economies.
Why This Matters:
The outcome of these trade talks will determine whether North American supply chains can return to the predictability that made the region competitive with Asia and Europe. The current tariff structure has forced manufacturers to recalculate sourcing decisions and investment plans, creating uncertainty that discourages capital formation. Mexico's digital payments initiative, meanwhile, represents a government mandate that could accelerate financial modernization but also raises questions about regulatory overreach in sectors where market-driven adoption might achieve similar results with less compulsion. The surge in investor-state arbitrations against Mexico signals growing friction between foreign capital and Mexican policy, particularly in energy and minerals. That legal exposure carries fiscal consequences and may complicate efforts to attract the investment needed to compete for manufacturing projects leaving China.