MEXICO · TRADE
Key Facts
- —The country Mexico, the southern US neighbour and a major car exporter, is negotiating US tariff cuts under the USMCA trade pact.
- —Why it matters US duties of 25% on Mexican cars and 50% on steel and aluminium raise costs for factories on both sides of the border.
- —Why now Economy Secretary Marcelo Ebrard answered lawmakers on Friday 16 October, the day a US newspaper said Commerce Secretary Howard Lutnick resists deep cuts.
- —What happened Ebrard said Mexico will “surely” win a reduction “in the coming weeks or months”, but named no signed deal, date or steel rate.
- —The numbers Mexico wants no car tariff above 15%, the rate paid by South Korea. About 80% of its US trade is duty-free, he said.
- —What it means for you US carmakers with plants in Mexico, steel buyers and car shoppers would gain from lower duties, but nothing is agreed.
- —Still open The fourth round of USMCA talks has no date, and Lutnick’s own position is known only second-hand.
- —Prediction markets Polymarket gives a formal USMCA extension in 2026 an 8.5% chance (17 October, 3:30 a.m. ET).
- —Power Index Mexico ranks 2nd of 14 in The Rio Times Latin America Power Index, with 71.4 points (October 2026 edition).
Mexico expects US tariff cuts on steel and cars within weeks or months, Economy Secretary Marcelo Ebrard told lawmakers in Mexico City on Friday 16 October. He named no signed deal, no date and no target rate for steel.
For US carmakers, steel buyers and car shoppers, the stakes are the 25% duty on Mexican cars and the 50% duty on steel and aluminium. Ebrard’s words are an expectation, not an agreement, and they came on the day a US newspaper reported resistance inside the Trump administration.
What Ebrard Told Deputies on Friday
Ebrard spoke to committees of the Chamber of Deputies during the review of President Claudia Sheinbaum’s second government report. He called the steel and vehicle duties “general measures” and said, in Spanish, that “we will surely achieve” a reduction “in the coming weeks or months”.
He added that keeping the economic relationship with the United States alone takes “probably 80, 85%” of his ministry’s time and effort. His summary of the strategy was “cold blood, persevere”.
Why Mexico Wants US Tariff Cuts on Steel and Cars
Washington charges 25% on Mexican cars and 50% on steel and aluminium, including finished goods made from them, under national-security rules known as Section 232. Ebrard said those two measures are the focus of the talks.
For cars, Mexico wants no maker to pay more than 15%, the rate the United States applies to vehicles from South Korea. Expansión reported that Mexico also wants to keep a model-by-model discount for regional content, which Ebrard said already holds the sector’s average payment well below 10%.
Ebrard argued that the gap hurts US brands as well, citing General Motors, which builds in South Korea, Mexico and the United States. He said misaligned tariffs would work against American brands and would also harm Mexico.
He contrasted Mexico with Japan, which he said agreed to invest US$500 billion in the United States. Mexico, he said, wants a lower car tariff but will not make an investment of that size.
Ebrard Answers the Report on Lutnick
The Wall Street Journal reported on Friday, citing people familiar with the talks, that Lutnick has resisted deep cuts to the car and metals duties. As relayed by Expansión and El Universal, the paper also said officials in both countries deny a deadlock.
Lutnick is the US Commerce Secretary, whose department runs the Section 232 duties, and Jamieson Greer is the US Trade Representative. Ebrard said Lutnick has never told him he opposes lowering the Section 232 duties, and called him “a good friend”.
Ebrard said the talks continue every day and are “not interrupted”. His last in-person meeting with Lutnick was in North Carolina, during the G20, according to the Expansión account.
How Much of Mexico’s Trade Pays US Tariffs
Ebrard said about 80% of Mexico’s trade with the United States enters without tariffs, and later put the share of exports at between 82% and 85%. He put the average effective tariff on Mexican exports at 3% to 3.2%.
Those are his figures for all exports, and they differ from the sector rates now under negotiation. Ebrard presented them as a favourable result, while the steel and car duties remain the open items.
USMCA Review and the Fourth Round
Ebrard said Mexico’s priority in the USMCA review is to reduce the uncertainty of annual reviews, after the 16-year extension sought by Mexico and Canada was not granted. The USMCA is the US-Mexico-Canada trade pact, known in Mexico as T-MEC.
The fourth round of talks with the United States has no date yet but must take place before the end of the year, he said. Earlier talks are covered in Mexico’s Sheinbaum Says No USMCA Deal Yet and Mexico Business Lobby Seeks US Tariff Cuts in Round 4.
What It Means for You
For US readers, the link is the integrated car and steel supply chain, where parts cross the border several times before a vehicle is sold. A lower duty would ease costs for Detroit carmakers and their suppliers, as set out in Auto Tariffs Hit North America Supply Chain.
Nothing changes for prices or orders until Washington signs a tariff order, and none has been announced. Mexico has already opened a duty exemption on assembly parts to 11 carmakers, covered in Mexico Scraps 10% Tariff on Car Parts; more Mexico coverage is at Mexico news in English.
What Is Not Known
No deal text, signing date or steel tariff rate has been published, and Ebrard did not give one. Lutnick’s position is known only from unnamed sources in the Journal report and from Ebrard’s account of their talks.
Outlets describe the car proposal differently, with Expansión reporting a 15% cap combined with content discounts and El Universal quoting a cut from 25% to 15% regardless of regional content. The Journal report itself was not opened for this article, so it is cited only as relayed by Mexican outlets.
What Prediction Markets Say
Polymarket’s market on whether the USMCA is formally extended in 2026 priced “Yes” at 8.5% and “No” at 91.5% on Saturday 17 October (3:30 a.m. ET). The market has traded about US$11,500 in total, which is thin.
These are real-money bets, not polls, and small volumes mean prices can move fast. The market covers the pact’s extension, not the steel and car tariffs, so it is context rather than a forecast of Ebrard’s expectation.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
Frequently Asked Questions
What did Ebrard say about US tariff cuts?
He said Mexico expects a reduction in US tariffs on steel and vehicles “in the coming weeks or months”. He did not announce a signed deal, a date or a steel rate.
What are the current US tariffs on Mexican cars and steel?
The United States charges 25% on Mexican cars and 50% on steel and aluminium, including finished products made from them. These duties are imposed on national-security grounds under Section 232.
What does Mexico want for cars?
Mexico wants no car to pay more than 15%, in line with the rate applied to vehicles from South Korea. Expansión reported it would keep regional-content discounts, but El Universal quoted a 15% rate regardless of content.
Is Howard Lutnick blocking a deal?
The Wall Street Journal reported that Lutnick resisted deep cuts, according to Mexican outlets relaying the story. Ebrard said Lutnick has never told him he opposes lowering the Section 232 duties.
When is the next round of USMCA talks?
The fourth round has no date yet. Ebrard said it must be held before the end of the year.
Sources: Expansión, 16 October 2026; El Universal, 16 October 2026; El Universal on the Wall Street Journal report, 16 October 2026; Diario de Yucatán, 15 October 2026. Prediction-market prices from Polymarket public data, 17 October 2026, 3:30 a.m. ET.
In depth
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