Mexico anticipates trade outcomes similar to US-Canada deal as USMCA splinters into bilateral tracks

The trilateral trade deal that once unified North American commerce is quietly becoming two bilateral ones. Mexico’s Economy Minister Marcelo Ebrard announced that the country expects to land trade terms with the United States comparable to those taking shape in the parallel US-Canada negotiations, signaling confidence even as the clock ticks on a shifting negotiation landscape.

The statement came after the US decided on July 1, 2026, not to renew the United States-Mexico-Canada Agreement in its current form, opting instead for annual reviews and separate bilateral conversations with each neighbor. What was designed as a unified continental trade architecture is now being renegotiated in two distinct rooms.

From trilateral to bilateral

The USMCA has governed roughly $2 trillion in trilateral trade since it took effect on July 1, 2020. Its first formal six-year review was always expected to be a significant moment, but the US decision to abandon the existing structure entirely and pursue separate tracks with Mexico and Canada exceeded what many trade watchers anticipated.

Canada moved first. US-Canada negotiations advanced rapidly ahead of a tariff deadline on August 19, 2026, creating a benchmark that Mexico is now positioning itself to match or exceed. Ebrard framed Canada’s progress not as a competitive threat but as a useful reference point, suggesting Mexico views the Canadian deal as a floor rather than a ceiling for its own ambitions.

What’s on the table

The core issues driving these renegotiations are familiar ones: trade deficits, supply-chain security, and tariff structures. The US has signaled willingness to impose significant duties on Canadian goods if talks stall, and similar leverage presumably applies to Mexico.

Mexico’s negotiating position carries its own complexities. President Claudia Sheinbaum’s government must balance concessions to US demands, likely involving tighter rules of origin, labor standards, and potentially energy sector access, against domestic political realities. Ebrard, who previously served as Mexico’s Foreign Minister, brings diplomatic experience to what is fundamentally a diplomatic challenge dressed in economic clothing.

The shift to bilateral negotiations also changes the power dynamics in subtle ways. Under the trilateral USMCA framework, Mexico and Canada could occasionally present a united front against US proposals. That implicit alliance dissolves when each country sits across the table from Washington alone. The US gains leverage by being able to play one deal against the other, while Mexico and Canada lose the ability to coordinate positions.

Market implications of a fragmented trade landscape

For companies with operations spanning North America, the transition from a single trilateral agreement to two bilateral deals introduces a new layer of uncertainty. If the US-Canada deal establishes one set of rules of origin and the US-Mexico deal establishes another, companies would need to manage compliance across two different regulatory regimes instead of one.

Ebrard’s public confidence is itself a signal worth reading carefully. Announcing that you expect parity with Canada’s deal is a way of anchoring expectations, both domestically and in Washington.

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