President Donald Trump and Mexican President Claudia Sheinbaum spoke by phone on Wednesday, two days ago, as negotiations continue over punishing US tariffs that've driven up costs for manufacturers and consumers on both sides of the border. Sheinbaum confirmed the contact at her morning press conference the next day and pointedly asked what the United States is doing domestically to address shared challenges. "We in Mexico are acting," she said. "But what happens on the other side?" She called it a very good call on Friday and said the possibility of an agreement is advancing well.
The talks center on US duties that stand at 50 percent on Mexican steel and aluminum and 25 percent on cars and auto parts that don't qualify under the USMCA, the trade agreement linking the two economies. Goods that fail the agreement's origin rules face similar barriers. A restructuring in April and June 2026 softened part of this, with USMCA-qualifying goods now paying the metals duty only on their non-US content. But the relief hasn't been enough to shield workers in automotive and manufacturing sectors from supply chain disruptions and layoffs tied to the tariff regime.
Fourth Round of Talks Set for Washington
The fourth formal round of talks is scheduled for September 28-29 in Washington, one week later than first planned. US Trade Representative Jamieson Greer leads for Washington, and Economy Secretary Marcelo Ebrard leads for Mexico City. US Commerce Secretary Howard Lutnick traveled to Mexico earlier this month as the talks accelerated. Three formal rounds have taken place since July, when the United States declined to renew the USMCA in its current form about two months ago, moving it into annual reviews that can run through 2036.
Reuters reported seven days ago that both sides want a framework before the US midterm elections in November. The timeline reflects pressure from business groups and labor unions who've warned that prolonged uncertainty threatens jobs and investment across North America's integrated manufacturing base.
Mexico Pushes Digital Payments to Expand Financial Access
Mexico's Digital Economy Law for Digital and Electronic Payments was sent to Congress ten days ago and published in the parliamentary gazette the same day. The bill would let the finance ministry designate sectors where accepting digital payment becomes compulsory, and it would require public sector entities 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, and the policy logic is that acceptance drives usage rather than the other way round. Brazilian officials cite their instant payment system, which moved from launch to near-universal use in about four years because acceptance came first. The comparison matters for a country where millions of working families lack access to affordable banking services.
Investment Arbitration Cases Pile Up
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 about two months ago, 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. The pattern underscores how investor-state dispute mechanisms can expose governments to costly legal challenges when they attempt to regulate in the public interest, particularly around environmental protections and resource extraction.
Why This Matters:
The trade negotiations carry direct consequences for workers whose livelihoods depend on cross-border supply chains that've been disrupted by tariffs neither government initially wanted but both now must navigate. Sheinbaum's pointed question about US domestic action reflects a reality where burden-sharing in trade disputes often falls unevenly, with working families bearing costs through higher prices and job insecurity. Mexico's digital payments push represents an effort to expand financial inclusion for millions locked out of formal banking, using regulatory mandates to build infrastructure that markets alone haven't delivered. The surge in investor-state arbitrations highlights a tension between sovereign regulation and corporate legal challenges that can chill environmental and labor protections, with developing economies facing the vast majority of these cases. Together, these developments illustrate how trade policy, financial access, and investment rules shape who benefits from economic integration and who pays the price.