The United States will begin a 90-day negotiation phase with Mexico regarding trade, while the 25% tariff rates remain active, as part of the surge in trade activity on Thursday ahead of President Donald Trump's plan to implement a wide range of global taxes starting on Friday.
Trump shared on his Truth Social account that his phone call with Mexican leader Claudia Sheinbaum was "very successful, as we continue to learn more about each other and gain a better understanding."
The Republican president had warned of 30% tariffs on Mexican products in a letter from July, a move that Sheinbaum stated Mexico can now avoid for the next three months.
"We escaped the tariff hike scheduled for tomorrow and have 90 days to develop a lasting agreement via discussion," Sheinbaum posted on X.
The heads of state's early morning discussion took place during a period of economic stress and unpredictability.
Countries are rushing to establish the details of a trade agreement with Trump to prevent him from introducing increased tax rates that might disrupt economic systems and political structures.
Trump finalized an agreement with South Korea on Wednesday, following previous deals with the European Union, Japan, Indonesia, and the Philippines.
The U.S. commerce secretary, Howard Lutnick, mentioned during an appearance on Fox News' "Hannity" show that there were pacts with Cambodia and Thailand following their agreement to a ceasefire in their border dispute.
Several individuals remain unsure about their professional classification.
Norwegian Finance Minister Jens Stoltenberg stated that it was "entirely unclear" if an agreement would be finalized before Trump's deadline.
However, the public declaration of an agreement may provide little comfort to an American business partner.
EU representatives are awaiting the finalization of a key document that details how the system for taxing imported vehicles and other products from the 27-nation bloc would function.Trump revealed an agreement on Sundaywhile he was in Scotland.
"The United States has made these pledges. It is now up to the U.S. to carry them out. The responsibility lies with them," said Olof Gill, a spokesperson for the EU Commission.
The text would not hold legal force.
Trump mentioned in the deal with Mexico that products entering the U.S. would still be subject to a 25% tax, which he has supposedly connected to the flow of fentanyl.
He mentioned that vehicles would be subject to a 25% tax, whereas copper, aluminum, and steel would incur a 50% charge throughout the negotiation phase.
He mentioned that Mexico would eliminate its "Non Tariff Trade Barriers," but he did not offer details.
Certain products remain shielded from tariffs under the 2020 United States-Mexico-Canada Agreement (USMCA), an accord that Trump finalized in his initial presidential term.
However, Trump seems to have lost enthusiasm for that agreement, which is set to be renegotiated next year. One of his initial major actions as president was to impose tariffs on products from both Mexico and Canada earlier this year.
According to data from the US Census Bureau, the United States experienced a trade deficit of $171.5 billion (€149 billion) with Mexico in the previous year. This indicates that the US imported more products from Mexico than it exported to the country.
The trade deficit with Mexico has increased since the implementation of USMCA, having been $63.3 billion (€55 billion) in 2016, the year prior to Trump's first presidential term.
In addition to tackling fentanyl smuggling, Trump has set a priority on reducing the trade deficit.