US-Mexico tariff talks stall over Lutnick's refusal to cut auto levies
Mexico wants the 25% auto tariff below 15%, but Commerce Secretary Howard Lutnick is also resisting cuts to steel and aluminum tariffs on finished goods
Published
Talks between the United States and Mexico over tariff cuts have stalled, with Commerce Secretary Howard Lutnick opposing major reductions to the 25% auto tariff and 50% steel and aluminum levies, the Wall Street Journal reported. Mexico has been pushing for auto tariffs of 15% or less.
The Journal reported that Lutnick also objected to lowering tariffs on finished products made of steel and aluminum, not just the raw metals and autos. The two countries had been closing in on a deal before talks slowed over the disagreement on vehicle and metals tariffs, according to the report.
Mexico's deputy trade minister, Luis Rosendo Gutierrez, said there had been progress in the negotiations, while a Commerce Department spokesperson said the department remained in constant dialogue with Mexico on trade. As of October 12, no date had been set for a fourth round of talks, and no tariff cut had been agreed, according to the Mexican Times. Mexico's top business lobby, the CCE, has said it wants the next round of talks to produce US tariff cuts on cars, steel, aluminum and copper, and its president proposed on October 12 that Mexico buy more US oil, gas, gasoline and diesel to help secure those cuts.
The stall reverses momentum that had been building since late September, when Mexico grew confident about cutting steel and auto tariffs, and President Claudia Sheinbaum reported progress as recently as October 12. Lutnick's resistance reopens the gap between President Trump's repeated description of a deal as "very close" and an actual signed agreement, a gap that has defined this negotiation for a month. Automakers are now weighing shifts in production away from Mexico, adding a concrete supply-chain consequence on top of the rhetoric, and pushing renewal of the USMCA trade pact further from resolution as the list of unresolved issues, energy, deficits and now tariff levels, keeps growing rather than shrinking.