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By: Dr. Alejandro Diaz-Bautista, Economist and Research Professor (PhD).
On July 31, 2025, the governments of Mexico and the United States reached an agreement that postpones for 90 days the imposition of new tariffs on Mexican products. The negotiation was led by President Claudia Sheinbaum and President Donald Trump, in a context of growing U.S. protectionism and global trade tensions.
The main points included a 90-day extension to negotiate a long-term trade agreement, no increase in tariffs or duties, but maintaining the 25% tariff on fentanyl and automobiles, and the 50% tariff on steel, aluminum, and copper; immediate elimination of non-tariff barriers by Mexico; protection of the USMCA (T-MEC), with only products outside the treaty affected; and a nearly finalized border security agreement.
The geopolitical context is Trump’s “America First” policy in 2025, renewed with an emphasis on industrial self-sufficiency, Mexico as a strategic partner and main exporter of manufactured goods to the United States, and pressure on Canada, Brazil, and South Korea facing tariffs from 25% to 50%.
The immediate economic impact is currency stability with the dollar closing at 18.85 MXN, with a slight depreciation. There was a positive business reaction, with the Business Coordinating Council (CCE) rating the agreement as “positive.”
In the United States, Wall Street saw gains driven by Microsoft and Meta earnings. There is optimism in technology sectors alongside investment in AI infrastructure.
There is a risk of USMCA (T-MEC) breakdown if a definitive agreement is not reached within 90 days. Currency volatility could occur if tariff threats reactivate, along with industrial slowdown due to supply chain uncertainty by late 2025.
The security agreement has four pillars summarized as sovereignty, mutual trust, territorial respect, and collaboration.
On his Truth Social platform, President Trump stated:
“I just concluded a phone conversation with Mexico’s President Claudia Sheinbaum, which was very fruitful, as we know and understand each other better and better. The complexities of an agreement with Mexico are somewhat different from those with other countries because of border issues and resources. We have agreed to extend, for 90 days, exactly the same agreement we had during the previous short period, meaning Mexico will continue paying a 25% fentanyl tariff, a 25% tariff on automobiles, and a 50% tariff on steel, aluminum, and copper.”
The agreement reached between Mexico and the United States on July 31, 2025, represents a strategic truce amid an aggressive U.S. trade policy. Mexico succeeded in avoiding new tariffs, protecting the USMCA, and maintaining open dialogue, which strengthens its position as a reliable partner in 2025. However, the 90-day deadline imposes significant pressure to achieve a definitive agreement that guarantees medium- and long-term economic and trade stability.
Dr. Alejandro Díaz-Bautista: Research Professor in International Economics at Colef.
Distinguished member of the National System of Researchers of the National Council of Humanities, Sciences, and Technologies (Conahcyt) and now at the new Secretariat of Science, Humanities, Technology, and Innovation (Secihti).