USMCA to keep tariffs as US opens bilateral talks with Mexico, freezing out Canada

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By bnl editorial staff May 27, 2026

The United States intends to maintain tariffs on imports from both Mexico and Canada even after the USMCA is revamped, US Trade Representative Jamieson Greer confirmed on May 26, as Washington launched the first formal bilateral negotiating rounds with Mexico City this week — pointedly excluding Canada, Reuters and El Economista reported.

"The US is going to have tariffs. Even with somebody like Mexico, or other countries in our own hemisphere, we're going to have tariffs as long as we have a giant trade deficit," Greer said at a Council on Foreign Relations event in Washington.

The declaration strips away any remaining ambiguity about what the revamped agreement will look like. The six-year-old USMCA, first negotiated by President Donald Trump during his first term, will not survive as a tariff-free zone. For Mexico, which has spent months hoping that strong trade cooperation and record market share in US goods trade might earn it relief from Section 232 steel and aluminium duties, Greer's words land as confirmation of what industry has feared.

The steel numbers make the stakes plain. Mexico's steel exports to the US fell 36.6% in 2025 to $2.24bn after tariffs were raised from 25% to 50% in June of that year, knocking Mexico from third to fifth among US steel suppliers and cutting its market share from 11% to 9%. Canada fared no better, with its steel exports to the US falling 36.5% to $45.6bn over the same period, costing it its position as top supplier to the EU. Mexico's steel industry lobby Canacero has argued that Washington should treat Mexico as a USMCA ally rather than grouping it with China and other non-market economies in its trade investigations.

The bilateral talks opening this week in Mexico City will focus on rules of origin and economic security — code for two things Washington wants: more US content in manufactured goods, particularly in the automotive sector, and higher Mexican tariffs on goods from outside North America to tighten the region's external perimeter. "I want to have our supply chain sourced from this hemisphere, from North America," Greer said, while making clear that rules of origin changes are designed to shift more production to the US specifically.

Canada, meanwhile, finds itself in a distinctly different position. Greer said Washington's issues with Ottawa went well beyond trade irritants, drawing a direct parallel with China as one of the few partners to have retaliated rather than accept US tariff rates. "It's hard to see necessarily where that ends," he said, dismissing Canadian automotive production as a product of government mandate rather than natural advantage. "We want to build cars here."

For Mexico, the week's talks represent an opportunity to shape the new framework before positions harden, even as Economy Secretary Marcelo Ebrard acknowledged earlier this month that a clean July 1 closure was unlikely and that negotiations could drag on for years. Meanwhile, the EU-Mexico trade deal signed last week, and the bilateral Canada mission in May reflect the same underlying calculation: that the familiar architecture of North American trade is being rebuilt on different foundations, and Mexico needs more options than it currently has.