The talks, which exclude Canada, are set to run for three days and are the first formal discussions on changes to the U.S.-Mexico-Canada Agreement since the Trump administration declined to extend the six-year-old regional trade pact on July 1

International News via Reuters:

U.S. and Mexican trade negotiators will meet for a third round of bilateral talks on Tuesday to try to push forward with revising the North American trade agreement, just as President Donald Trump slaps Canada with a new set of punitive duties.

The talks, which exclude Canada, are set to run for three days and are the first formal discussions on changes to the U.S.-Mexico-Canada Agreement since the Trump administration declined to extend the six-year-old regional trade pact on July 1.

The move started a clock to wind down USMCA within 10 years unless the three countries can agree on improvements. Industry groups have urged Trump to keep intact the trilateral structure and largely tariff-free access that underpins nearly $1.6 trillion in annual trade.

U.S. Trade Representative Jamieson Greer, who is due to join the talks on Wednesday, said that Trump’s “number one goal” for USMCA was to see lower U.S. trade deficits with Canada and Mexico and more manufacturing reshored to the U.S.

The U.S. goods trade deficit with Mexico grew last year by $28 billion, or 17%, to $197 billion, according to data from the U.S. Census Bureau, which comes under the Commerce Department. The U.S. trade gap with Canada fell by $12.9 billion or 21% last year to $48.3 billion.

“We want the outcomes to make sense. We want to have more auto manufacturing here, and we’re seeing it,” Greer told CNBC on Tuesday, citing some moves by automakers to open new assembly capacity in the U.S., including Toyota’s expansion of a Texas plant to build trucks now assembled in Mexico.

“So that’s the outcome that he wants,” Greer added. “I think also if we can have an arrangement with Mexico, with Canada, that we are trying to emphasize Canadian, Mexican, U.S. content in goods traded in North America, that’s a good outcome because that helps get supply chains back here in North America.”

During bilateral USMCA talks with Mexico in May, USTR proposed requiring that 50% of the value of North American-built vehicles originate in the United States, a significant departure from current rules and a difficult adjustment for automakers with highly integrated regional supply chains.

YEAR-END GOAL

Mexico’s new ambassador to the U.S., Roberto Lazzeri, said on Friday that Mexico was expecting to reach a new deal by the end of the year, and that he believes the U.S. and Canada are aiming for the same goal.

“Every moment that we’re losing, I think we are losing competitiveness, market share and investment, so it’s in the best interest of all three of us to get to a position of resolution soon,” said Lazzeri, a former investment banker and finance ministry official.

He added that Mexico shares the Trump administration’s goal of bringing more manufacturing to North America, including to the U.S. Another key goal for Mexico is to win some relief from Trump’s 25% national security tariffs on Mexican autos and 50% on its steel and aluminum products, duties also applied to Canada.

TARIFF SETBACK FOR CANADA  

The talks come a day after the Trump administration announced new tariffs on nearly $20 billion worth of Canadian goods over Ottawa’s retaliatory tariffs on U.S. autos, steel, aluminum and liquor and its high dairy tariffs.

That move deepens a rift that has kept Canada largely sidelined in the USMCA negotiations, as Greer has decried little movement towards concessions.

Canadian Prime Minister Mark Carney said in a statement that his government had made comprehensive proposals to resolve trade disputes with Washington, adding that Trump’s past tariffs violated the North American trade pact.

Greer has meanwhile lauded Mexico for its lack of retaliation to U.S. tariffs and “pragmatic” approach to negotiations that include work to align Mexico’s export controls with those of the U.S., steps to protect intellectual property rights and moving to curb the export of avocados grown on illegally deforested land.

AUTOS AND ECONOMIC SECURITY

The talks in Mexico City will dig into technical details of U.S.-Mexico trade in autos, steel, aluminum, agriculture and labor, according to Greer’s office.

The discussions will also focus on “economic security,” USTR’s term for raising regional trade protections to keep China and other Asian countries from using Mexico and Canada to access the lucrative U.S. market on preferential terms.

China’s growing footprint in Mexico’s car market represents a potential irritant in the talks. Reuters on Monday reported that new distribution figures showed Chinese car sales rose 30% in the first half of 2026, despite 50% tariffs imposed in January, with Chinese brands raising their market share to 17% from 14% a year earlier.

People familiar with the talks have said that the U.S. wants its North American partners to erect similar trade barriers to non-regional goods, including vehicles, auto parts, steel, aluminum and other components.

Additional reporting by Emily Green in Mexico City; Editing by Hugh Lawson and Jon Boyle

The new tariffs, set to take effect in 30 days, would also apply to dairy products, swimming pools, furniture, fishing rods, seeds, clothing and wigs, among other items

International News via Reuters:

President Donald Trump unveiled 50% tariffs on a wide range of imports from Canada on Monday in response to what the U.S. administration called its discriminatory treatment of American-made cars, alcohol and dairy goods, threatening a new front in a global trade war.

In slapping import taxes on goods ranging from wine to cement and ice hockey gear, Trump invoked Section 338 of the Tariff Act of 1930, which permits a president to impose punitive tariffs of up to 50% against trading partners deemed to have discriminated against U.S. goods. That marked the law’s first known usage in nearly a century of existence.

The new tariffs, set to take effect in 30 days, would also apply to dairy products, swimming pools, furniture, fishing rods, seeds, clothing and wigs, among other items.

The U.S. Trade Representative’s office said that the tariffs would apply to nearly $20 billion of imports from Canada. That’s about 5.2% of the $382 billion worth of goods that the U.S. imported from Canada in 2025, according to U.S. Census Bureau data.

“While the Administration continues to secure fair and reciprocal trade deals with our trading partners, Canada, unlike other partners and allies, continues to retaliate against the United States for its efforts to rebalance trade and protect U.S. industry in national-security sensitive sectors,” U.S. Trade Representative Jamieson Greer said in a statement.

Canadian Prime Minister Mark Carney said in a statement that his government has made comprehensive proposals to resolve trade disputes with Washington, asserting that Trump’s past tariffs violated the North American trade pact.

“This trade dispute has raised costs for families, particularly in the U.S.,” he said. “Canada stands ready to engage intensively to address outstanding issues with the U.S. to the mutual benefit of our citizens.”

The Trump administration has long complained that Canada and China implemented retaliatory measures in response to the barrage of tariffs Trump has tried to impose since returning to the White House last year.

Greer has pointedly left Canada out of negotiations under way with Mexico on changes the U.S. wants in the U.S.-Mexico-Canada Agreement on trade. He holds bilateral talks on USMCA in Mexico City this week.

When Trump and Carney met at the FIFA World Cup Final in New Jersey on Sunday, Trump demanded that Carney take action to contain wildfires that have sent smoke billowing across swaths of the U.S. The U.S. president last week threatened to add the “incalculable cost” of dealing with the pollution to existing tariffs on Canadian goods.

FIRST USAGE

The Tariff Act of 1930 and its Section 338 are better known for massive U.S. tariff increases and subsequent retaliation that economic historians say worsened the Great Depression of the 1930s.

Section 338 was intended to ensure countries apply tariffs equally and don’t give preferential rates to some countries at the expense of U.S. exports, said John Veroneau, a U.S. trade official in President George W. Bush’s administration who has extensively researched the statute.

He said that some presidents, including Franklin D. Roosevelt, considered imposing tariffs under Section 338, but no record could be found of any president taking such action until Trump’s proclamations on Monday.

“It is ironic, to say the least, to use this authority to impose tariffs to retaliate against tariffs that were imposed in response to actions taken by the U.S.,” said Veroneau, senior counsel with the Covington and Burling law firm.

“These tariffs may be lawful under Section 338, but they at a minimum violate the spirit of Section 338, which was to create a world where countries apply the same tariffs on the same goods to all countries,” he said, adding Trump has moved away from this principle “in a maximalist way.”

After World War Two, major countries created the “most-favored-nation” tariff system through the General Agreement on Tariffs and Trade to try to prevent a return to the pre-war “beggar-thy-neighbor” economic policies marked by competitive trade restrictions and currency devaluations.

Trump’s new levies are set to take effect on August 19 and apply regardless of whether goods qualify for tariff exemptions under USMCA, although Trump exempted a range of key goods including energy, potash, fish, critical minerals and products already covered by Section 232 tariffs.

Among grounds for the tariffs, the White House cited Canada’s “protectionist” dairy supply management system as well as tariffs and quotas on cars imported to Canada from the U.S. but not from other countries. Carney said that Canada “as is its right, merely matched” U.S. tariffs on the auto sector that were in violation of the USMCA.

Washington also highlighted that most Canadian provinces have halted the sale of U.S. alcohol, which they did in response to prior U.S. tariffs.

The White House said Canadian imports of U.S. motor vehicles dropped by 22% and of U.S. alcoholic beverages by 81% over the past year.

Diamond Isinger, a former senior adviser to ex-Prime Minister Justin Trudeau on U.S.-Canada relations, said Carney would have limited ability to compel provinces to start selling American alcohol again.

“Unless there are some sort of extraordinary measures invoked here, the premiers of those provinces are the ones who decide whether to restock alcohol,” Isinger said.

Reporting by Ryan Patrick Jones in Toronto and David Lawder in Mexico City; Additional reporting by Maria Cheng in Ottawa; Writing by Dan Burns; Editing by Michelle Nichols and Cynthia Osterman