The Deal
On the morning of Thursday, March 6, 2025, Mexican President Claudia Sheinbaum and U.S. President Donald Trump held a phone call to discuss the tariffs the United States imposed on Mexican imports. Following their conversation, both leaders confirmed on social media that Mexico would not be required to pay tariffs on any products that fall under USMCA until April 2, 2025. Shortly after, Sheinbaum addressed the agreement in La Mañanera del Pueblo, her daily morning press conference. Sheinbaum revealed that while Trump had initially been inclined to maintain the tariffs, Mexico presented compelling data demonstrating a continuous reduction in fentanyl trafficking into the U.S..
Fair and Reciprocal Plan on Trade
The United States moved trade negotiations with Mexico under the Fair and Reciprocal Plan on Trade, a trade policy set to take effect on April 2, 2025, which introduces reciprocal tariffs on all U.S. trading partners. The foundation for this plan was laid out on February 13, 2025, when the White House released a fact sheet titled "President Donald J. Trump Announces Fair and Reciprocal Plan on Trade." The document outlined the administration’s goal of restoring fairness in U.S. trade relationships and countering what it sees as non-reciprocal agreements. However, while this plan applies broadly to all U.S. trading partners, Mexico remains largely unaffected because of its free trade status under USMCA. The existing framework ensures that nearly all traded goods between the two countries remain tariff-free, making this more of a formalized continuation of trade conditions rather than a structural change.
USMCA: The Cornerstone of North American Trade
Under the USMCA framework, the United States’ reciprocal tariff strategy has little impact on Mexico, as both countries operate under a free trade agreement covering nearly all exchanged goods. USMCA is scheduled for a joint review on July 1, 2026, when the United States, Mexico, and Canada will reassess the terms of the agreement. While no full-scale renegotiations have begun, ongoing U.S.-Mexico trade discussions indicate that the groundwork for future adjustments is already being laid. The agreement, which evolved from NAFTA, has been instrumental in strengthening North America’s competitive position in global markets. Both Trump and Sheinbaum have signaled strong interest in revitalizing domestic manufacturing—Trump through reshoring American production and Sheinbaum through Plan México, aimed at expanding Mexico’s industrial base. However, this does not necessarily conflict with USMCA.
Areas of Cooperation: Strengthening Bilateral Security Efforts
From the beginning of U.S. tariff announcements, the U.S. structured its trade negotiations around two key pillars: curbing illegal migration and stopping fentanyl trafficking. These were non-negotiable conditions for Trump’s administration in trade discussions. However, Sheinbaum successfully added firearm trafficking to the agenda, arguing that stopping the flow of illegal U.S. weapons into Mexico is important in addressing cartels and therefore fentanyl production. While Trump has not publicly committed to this as part of the trade deal, Sheinbaum continues to push for U.S. cooperation on this issue. Beyond trade, this agreement signals the beginning of a more structured and detailed security strategy between the two countries. With the U.S. formally designating several Mexican cartels as Foreign Terrorist Organizations (FTOs), both nations are moving toward a coordinated strategy to combat transnational criminal organizations (TCOs).
Analysis: A Calculated Deal That Reshapes U.S.-Mexico Relations
The U.S. has agreed not to impose tariffs on Mexico under USMCA until April 2, 2025. While this confirms that the tariff threat was real, it also shows that President Trump made a calculated risk to bring Mexico into negotiations on its two major concerns: migration and fentanyl trafficking. This high-stakes negotiation successfully brought both nations to the table, and now, the U.S. has transitioned Mexico under the Fair and Reciprocal Plan on Trade. This shift isn’t just a change of course—it formalizes the outcome of these negotiations. Mexico remains exempt from tariffs, and the U.S. is now positioning itself to reevaluate its overall trade relationships under the framework of fair reciprocity. USMCA remains the cornerstone of North American trade, providing the economic foundation that keeps the region competitive in global markets. Both Mexico and the U.S. understand its importance, and despite Trump’s push for more domestic manufacturing in the U.S., and Sheinbaum’s vision for expanding Mexico’s industrial base, these goals do not contradict USMCA. Instead, they reflect a shared interest in strengthening both individual economies and regional supply chains. Lastly, Mexico’s ongoing efforts on migration and fentanyl will be key to ensuring this deal holds long-term. This agreement may have started as a trade discussion, but it is now shaping up to be one of the most comprehensive security cooperation strategies between the U.S. and Mexico in recent history.
Author
Aldrin Ballesteros
Communications Manager, Mexico Institute
Mexico Institute
The Mexico Institute seeks to improve understanding, communication, and cooperation between Mexico and the United States by promoting original research, encouraging public discussion, and proposing policy options for enhancing the bilateral relationship. A binational Advisory Board, chaired by Luis Téllez and Earl Anthony Wayne, oversees the work of the Mexico Institute. Read more
