{"id":28300,"date":"2026-06-30T14:54:35","date_gmt":"2026-06-30T21:54:35","guid":{"rendered":"https:\/\/dornsife.usc.edu\/news\/?p=28300"},"modified":"2026-09-13T21:53:49","modified_gmt":"2026-09-14T04:53:49","slug":"us-mexico-relationship-will-likely-limp-along-as-key-trade-talks-start","status":"publish","type":"post","link":"https:\/\/dornsife.usc.edu\/news\/stories\/us-mexico-relationship-will-likely-limp-along-as-key-trade-talks-start\/","title":{"rendered":"As key trade talks start, the US\u2011Mexico relationship will likely limp along \u2013 but at a\u00a0cost"},"content":{"rendered":"\n\n\n    \n                                \n\n  \n    \n\n\n\n\n\n\n<div\n  class=\"cc--component-container cc--article-hero \"\n\n  \n  \n  \n  \n  \n  \n  >\n  <div class=\"c--component c--article-hero\"\n    \n      >\n\n    \n<div class=\"inner-wrapper\">\n          \n<div class=\"f--field f--image\">\n\n    \n    \n    \n    \n    \n    \n              \n      <img\n                            data-src=\"https:\/\/dornsife.usc.edu\/news\/wp-content\/uploads\/sites\/7\/2026\/06\/starr-mexico-conversation-top-768x432.jpg\"\n          data-srcset=\"https:\/\/dornsife.usc.edu\/news\/wp-content\/uploads\/sites\/7\/2026\/06\/starr-mexico-conversation-top-1920x1080.jpg 1920w,https:\/\/dornsife.usc.edu\/news\/wp-content\/uploads\/sites\/7\/2026\/06\/starr-mexico-conversation-top-1280x720.jpg 1280w,https:\/\/dornsife.usc.edu\/news\/wp-content\/uploads\/sites\/7\/2026\/06\/starr-mexico-conversation-top-768x432.jpg 768w\"          data-sizes=\"(min-width:1200px) 75vw, (min-width:768px) 83vw, 100vw\"          class=\"lazyload\"\n        \n                  alt=\"Close up of person wearing mask using welding machine\"\n        \n        \n                                      \/>\n\n    \n    \n  \n  \n\n<\/div>\n  \n      <div class=\"image-caption\">\n          \n<div class=\"f--field f--description\">\n\n    \n  A review of the 2020 deal underpinning the U.S.-Mexico trade relationship will likely be hamstrung by President Donald Trump\u2019s trade-deficit fixation and aggressive use of tariffs. (Image source: Unsplash\/Christopher Burns.)\n\n\n<\/div>\n    <\/div>\n  \n  <div class=\"text-wrapper\">\n          <nav aria-label=\"Breadcrumb\" class=\"breadcrumbs\">\n        <ul>\n                      <li><a href=\"\/news\/stories\/\">News<\/a><\/li>\n                      <li><a href=\"\/news\/stories\/\/?category=politics\">Politics<\/a><\/li>\n                  <\/ul>\n      <\/nav>\n    \n              \n<div class=\"f--field f--page-title\">\n\n    \n  <h1>As key trade talks start, the US\u2011Mexico relationship will likely limp along \u2013 but at a\u00a0cost<\/h1>\n\n\n<\/div>\n    \n          <div class=\"subtitle\">\n            \n<div class=\"f--field f--description\">\n\n    \n  Even though Mexico is the U.S.\u2019s top trade partner, the fate of the pact underpinning that relationship is uncertain, argues a USC Dornsife political scientist.\n\n\n<\/div>\n      <\/div>\n    \n           <strong class=\"author-field\"><span >By<\/span><a href=\"mailto:communication@dornsife.usc.edu\">Pamela K. Starr<\/a><\/strong>\n    \n          <span class=\"post-date-field\">June 30, 2026<\/span>\n      <\/div>\n<\/div>\n\n\n  <\/div><\/div>\n\n  \n    \n\n\n\n\n\n\n<div\n  class=\"cc--component-container cc--social-share \"\n\n  \n  \n  \n  \n  \n  \n  >\n  <div class=\"c--component c--social-share\"\n    \n      >\n\n    \n  <div class=\"content-wrapper\">\n    <span class=\"a2a_kit a2a_kit_size_32 addtoany_list\" style=\"line-height: 32px;\">\n      <span class=\"title\">\n        Share\n      <\/span>\n                        <a class=\"a2a_button_copy_link\" target=\"_blank\" href=\"\/#copy_link\" rel=\"nofollow noopener\" title=\"Link\">\n            <span class=\"a2a_svg a2a_s__default a2a_s_copy_link\">\n              <svg height=\"19\" viewBox=\"0 0 19 19\" width=\"19\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"m7.43475275 9.52380952-2.17490843 2.26076008c-1.08745421 1.058837-1.68841575 2.518315-1.68841575 4.0350275 0 1.5167124.60096154 2.9475732 1.68841575 4.0350274 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xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"m8.14285714 9.42857143c-.17142857 0-.34285714 0-.51428571.08571428l7.28571427 6.34285719c.3428572.2571428.6857143.2571428.9428572 0l7.2857142-6.34285719c-.0857142-.08571428-.2571428-.08571428-.4285714-.08571428zm-1.28571428 1.11428567v.1714286 8.5714286c0 .6857143.6 1.2857143 1.28571428 1.2857143h14.57142856c.6857143 0 1.2857143-.6 1.2857143-1.2857143v-8.5714286c0-.0857143 0-.0857143 0-.1714286l-7.2 6.3428572c-.7714286.6857143-1.8857143.6857143-2.6571429 0z\" fill-rule=\"evenodd\" transform=\"translate(-6 -9)\"\/><\/svg>\n            <\/span>\n            <span class=\"a2a_label visually-hidden\">Email<\/span>\n          <\/a>\n                  <\/span>\n  <\/div>\n\n  <\/div><\/div>\n \n\n\n\n  \n    \n\n\n\n\n\n\n<div\n  class=\"cc--component-container cc--rich-text \"\n\n  \n  \n  \n  \n  \n  \n  >\n  <div class=\"c--component c--rich-text\"\n    \n      >\n\n    \n      \n<div class=\"f--field f--wysiwyg\">\n\n    \n  <p>Most Americans understand that their avocado toast and Super Bowl guacamole depend on a green fruit imported from Mexico. But few realize that Mexico is <a href=\"https:\/\/www.census.gov\/foreign-trade\/statistics\/highlights\/topyr.html\" target=\"_blank\" rel=\"noopener\">the United States\u2019 top trading partner<\/a>, both as the largest source of U.S. imports and the largest market for its exports.<\/p>\n<p><a href=\"https:\/\/www.congress.gov\/crs-product\/IF11175\" target=\"_blank\" rel=\"noopener\">Mexico supplies everything<\/a> from fruits and vegetables to computers, medical equipment and electrical machinery\u00a0\u2014 not to mention vehicles and auto parts. Mexico is also the top consumer of U.S. exports, ranging from corn, pork and dairy products to natural gas, to auto parts.<\/p>\n<p>Given these ties, the stakes will be high on July 1, 2026, when U.S., Mexican and Canadian trade negotiators begin a <a href=\"https:\/\/www.congress.gov\/crs-product\/R48964\" target=\"_blank\" rel=\"noopener\">required trilateral review<\/a> of the 2020 trade deal underpinning this relationship. But a de facto stalemate is likely, resulting in uncertainty that will dampen growth in all three member countries.<\/p>\n<p>Meanwhile, consumers will have to keep paying the tab for imports affected by Trump\u2019s tariffs, including <a href=\"https:\/\/www.npr.org\/2025\/04\/02\/nx-s1-5345802\/trump-tariffs-liberation-day\" target=\"_blank\" rel=\"noopener\">global tariffs<\/a> announced in April 2025, as well as specific <a href=\"https:\/\/www.kbb.com\/tariffs\/\" target=\"_blank\" rel=\"noopener\">levies on autos<\/a> and products made with <a href=\"https:\/\/www.cfr.org\/articles\/trumps-new-aluminum-and-steel-tariffs-explained-six-charts\" target=\"_blank\" rel=\"noopener\">steel and aluminum<\/a>. According to the <a href=\"https:\/\/www.dallasfed.org\/research\/economics\/2026\/0505-mau\" target=\"_blank\" rel=\"noopener\">Dallas Federal Reserve Bank<\/a>, the U.S. inflation rate in March 2026 would have been 0.8 percentage point lower year on year without these tariffs.<\/p>\n<p>As <a href=\"https:\/\/dornsife.usc.edu\/profile\/pamela-starr\/\">a scholar of U.S.-Mexico relations<\/a>, I argue this outcome reflects President Donald Trump\u2019s desire to reduce U.S. trade deficits, bring manufacturing back to the U.S. and retain coercive power over his neighbors. But all it will likely do is yield a poorly defined process of annual reviews of the longer-standing agreement \u2014 signed by Trump during his first term.<\/p>\n<h2>The logic of trade integration<\/h2>\n<p>The 2020 pact, known as the <a href=\"https:\/\/www.congress.gov\/crs-product\/R44981\" target=\"_blank\" rel=\"noopener\">U.S.-Mexico-Canada Agreement<\/a>, has been a linchpin for U.S. global competitiveness, especially for the trade relationship with Mexico. With some modifications, it succeeded the <a href=\"https:\/\/www.congress.gov\/crs-product\/R42965\" target=\"_blank\" rel=\"noopener\">1994 North American Free Trade Agreement<\/a>.<\/p>\n<p>Mexico doesn\u2019t export just <a href=\"https:\/\/theconversation.com\/soaring-us-beef-prices-likely-to-rise-further-thanks-to-trade-tensions-and-disease-outbreaks-284813\" target=\"_blank\" rel=\"noopener\">agricultural goods<\/a> and products assembled with factors of production imported from the U.S. It supplies such inputs to the U.S. production process as well. This bilateral trade supports key cross-border supply chains for regional manufacturing.<\/p>\n<p>This is most striking in the automotive industry. A telling measure is that a typical \u201cU.S.\u201d vehicle <a href=\"https:\/\/www.cato.org\/blog\/seven-charts-show-how-us-tariffs-would-harm-american-auto-industry\" target=\"_blank\" rel=\"noopener\">crosses the U.S.-Mexico border<\/a> up to eight times during the manufacturing process. The U.S. and Mexico don\u2019t just trade finished products; they produce things together, as <a href=\"https:\/\/www.wilsoncenter.org\/publication\/working-together-economic-ties-between-the-united-states-and-mexico\" target=\"_blank\" rel=\"noopener\">Mexico scholar Chris Wilson<\/a> has put it.<\/p>\n<p>These deeply integrated supply chains lower the cost of production, which in turn helps the U.S. compete with China, generate investment, spur job creation \u2014 and keep consumer prices down. Recognizing this, the Trump administration agreed to <a href=\"https:\/\/www.wsj.com\/livecoverage\/trump-tariffs-trade-war-stock-market-04-03-2025\/card\/what-products-and-which-countries-are-exempted-from-trump-s-tariffs--qN2fmWrIFejrHBSVD8g5\" target=\"_blank\" rel=\"noopener\">exempt all exports<\/a> that comply with the terms of the 2020 trade pact from the global tariffs announced in April 2025. This exemption <a href=\"https:\/\/mexicanist.com\/l\/majority-of-mexican-exports-would-dodge-new-trump-tariffs\/\" target=\"_blank\" rel=\"noopener\">now applies to 85% of Mexican exports<\/a>, according to Mexico Economy Secretary Marcelo Ebrard.<\/p>\n<h2>Annual reviews are likely outcome<\/h2>\n<p>Under the terms of the 2020 pact, the three countries have to review the deal after six years. <a href=\"https:\/\/www.congress.gov\/crs-product\/R48964\" target=\"_blank\" rel=\"noopener\">Potential outcomes<\/a> of the 2026 negotiation round range from renewing the deal in full for 16 more years, ending it altogether or agreeing to undergo a series of annual reviews that could extend it through 2036.<\/p>\n<p>Given the three countries\u2019 supply-chain integration, preserving predictability in trade and investment through a successful review should be a slam-dunk case. But that outcome looks unlikely for three reasons.<\/p>\n<p>First is Trump\u2019s <a href=\"https:\/\/www.nbcnews.com\/business\/economy\/trade-deficit-what-does-it-mean-for-economy-trump-tariffs-rcna199999\" target=\"_blank\" rel=\"noopener\">abhorrence of trade deficits<\/a>, stemming from his belief that they\u2019re caused by U.S. production and jobs moving overseas due to unfair trade practices. While this argument applies to U.S.-China trade to a certain degree, it does not to Mexico. For example, 30% of Mexican-manufactured exports to the U.S. <a href=\"https:\/\/www.dallasfed.org\/research\/pubs\/usmca\/degortari\" target=\"_blank\" rel=\"noopener\">include U.S. content<\/a>, a share that rises to 40% for vehicles. The effect of these integrated supply chains is to create jobs rather than replace them.<\/p>\n<p>What Trump also overlooks is that Washington\u2019s success in pressuring manufacturers to move production out of China and into low-cost producers \u2014 including Mexico \u2014 has helped widen the <a href=\"https:\/\/www.wsj.com\/economy\/trade\/mexico-exports-us-trump-tariffs-e891510a\" target=\"_blank\" rel=\"noopener\">U.S. trade deficit with Mexico<\/a>, a \u201cproblem\u201d of Washington\u2019s making. In fact, <a href=\"https:\/\/www.federalreserve.gov\/econres\/notes\/feds-notes\/mexico-in-u-s-supply-chains-lessons-from-2018-19-tariffs-20260605.html\" target=\"_blank\" rel=\"noopener\">a 2026 Federal Reserve study<\/a> found that 53% of the increase in Mexico\u2019s trade deficit with the U.S. over the past five years resulted from U.S. tariffs on Chinese exports.<\/p>\n<p>Despite such clear findings, the Trump administration remains fixated on reducing <a href=\"https:\/\/seekingalpha.com\/news\/4597228-ustr-greer-tariffs-mexico-canada-usmca-review\" target=\"_blank\" rel=\"noopener\">the U.S. trade deficit<\/a> with Mexico, making a successful review even less likely.<\/p>\n<h2>The reshoring illusion<\/h2>\n<p>Second, <a href=\"https:\/\/www.whitehouse.gov\/fact-sheets\/2025\/09\/fact-sheet-president-donald-j-trump-modifies-the-scope-of-reciprocal-tariffs-and-establishes-procedures-for-implementing-trade-deals\/\" target=\"_blank\" rel=\"noopener\">Trump is wedded<\/a> to the idea of \u201creshoring,\u201d or bringing production back to the U.S. But that position runs against the trade deal\u2019s logic of \u201cnearshoring,\u201d or bringing production back to North America. That was the principle also embedded in NAFTA.<\/p>\n<p>This reshoring obsession drove <a href=\"https:\/\/www.barrons.com\/articles\/trade-us-mexico-canada-auto-usmca-energy-agriculture-ba8e4c86\" target=\"_blank\" rel=\"noopener\">Washington\u2019s refusal<\/a> to exempt Mexican steel and aluminum exports from the 50% tariff that the administration imposed in mid-2025 and provide only a partial exemption on a 25% tariff on autos and auto parts. It\u2019s also behind Trump\u2019s demand to <a href=\"https:\/\/www.wsj.com\/politics\/policy\/trump-administration-wants-autos-under-usmca-to-be-at-least-50-made-in-america-c6204c18\" target=\"_blank\" rel=\"noopener\">add a high minimum U.S. content requirement<\/a> in autos.<\/p>\n<p>Taken together, the levies and demands by Trump will likely stymie a successful review of the pact that replaced NAFTA.<\/p>\n<h2>Coercion through chaos<\/h2>\n<p>Finally, Trump and his team believe that advancing Washington\u2019s interests depends on <a href=\"https:\/\/www.brookings.edu\/articles\/did-america-first-tariffs-work\/\" target=\"_blank\" rel=\"noopener\">wielding U.S. power to coerce<\/a> other countries. This includes using tariffs not merely to redirect international trade but to pressure allies and adversaries alike to meet U.S. demands.<\/p>\n<p>Mexico and Canada were the first two targets of this coercive tool in February 2025, when <a href=\"https:\/\/www.wsj.com\/economy\/trade\/trump-says-tariffs-are-coming-on-computer-chips-steel-and-more-cef9974c\" target=\"_blank\" rel=\"noopener\">Trump slapped tariffs<\/a> on all Mexican and Canadian exports to force their leaders to cooperate on migration and drug policies.<\/p>\n<p>Although the goods that fell under the 2020 trade pact were quickly declared exempt and the U.S. Supreme Court eventually ruled that the legal foundation for those levies <a href=\"https:\/\/theconversation.com\/supreme-court-rules-against-trumps-emergency-tariffs-but-leaves-key-questions-unanswered-276561\" target=\"_blank\" rel=\"noopener\">was unconstitutional<\/a>, Trump\u2019s desire to exploit the coercive power of tariffs persists. He has no incentive to ink a trade agreement that limits his power to impose tariffs at will.<\/p>\n<p>He restated this indifference in June 2026, <a href=\"https:\/\/www.reuters.com\/world\/trump-says-he-might-not-renew-usmca-2026-06-10\/\" target=\"_blank\" rel=\"noopener\">when he asserted<\/a> that he wasn\u2019t \u201clooking to renew\u201d the pact because he believes the U.S. would do better without it.<\/p>\n<p>\u201cWe don\u2019t need anything that Canada has,\u201d he added. \u201cWe don\u2019t need anything that Mexico has, but they need everything that we have. They have to treat us better.\u201d<\/p>\n<h2>Implications of annual reviews<\/h2>\n<p>Mexico needs investors to have the certainty provided by a successful review.<\/p>\n<p>But without knowing the future rules of the road, investors are sitting on the sidelines, which is <a href=\"https:\/\/www.wsj.com\/pro\/central-banking\/bank-of-mexico-cuts-2026-economic-growth-forecast-after-weak-start-bef8f1b4\" target=\"_blank\" rel=\"noopener\">weakening the country\u2019s growth strategy<\/a> tied to nearshoring. As a result, Mexico has focused on preserving the 2020 agreement \u2014 even if this means a more ad hoc cycle of annual reviews \u2014 because it still guarantees a lower tariff rate compared with what other countries face with Trump in the White House.<\/p>\n<p>Indeed, in a private conversation, a Mexican official told me that keeping this lower rate is a core objective in Mexico\u2019s trade talks with the United States.<\/p>\n<p>Although not ideal, this outcome would protect the North American supply chains that drive growth in a country where exports <a href=\"https:\/\/data.worldbank.org\/indicator\/NE.EXP.GNFS.ZS?locations=MX\" target=\"_blank\" rel=\"noopener\">account for 37% of its GDP<\/a>.<\/p>\n<p>But for Americans, an unsuccessful review followed by ongoing talks without resolution has few upsides. Instead, it\u2019s likely to weaken the U.S. competitive advantage relative to China \u2014 all while Trump\u2019s trade policy leaves them grappling with higher prices on products <a href=\"https:\/\/www.cnbc.com\/2025\/03\/27\/trump-auto-tariffs-car-prices-analysts.html\" target=\"_blank\" rel=\"noopener\">such as cars and trucks<\/a> and with no <a href=\"https:\/\/www.foxnews.com\/politics\/trump-bet-tariffs-would-bring-back-american-factory-jobs-new-report-says-didnt-work\" target=\"_blank\" rel=\"noopener\">uptick in job creation<\/a>.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img loading=\"lazy\" decoding=\"async\" style=\"border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;\" src=\"https:\/\/counter.theconversation.com\/content\/285112\/count.gif?distributor=republish-lightbox-basic\" alt=\"The Conversation\" width=\"1\" height=\"1\" \/><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https:\/\/theconversation.com\/republishing-guidelines --><\/p>\n<p><a href=\"https:\/\/theconversation.com\/profiles\/pamela-k-starr-450198\" target=\"_blank\" rel=\"noopener\">Pamela K. Starr<\/a>, <span class=\"person-title\">Professor of the Practice of <a href=\"https:\/\/dornsife.usc.edu\/poir\/\">Political Science and International Relations<\/a><\/span>, <em><a href=\"https:\/\/theconversation.com\/institutions\/usc-dornsife-college-of-letters-arts-and-sciences-2669\" target=\"_blank\" rel=\"noopener\">USC Dornsife College of Letters, Arts and Sciences<\/a>.<\/em><\/p>\n<p>This article is republished from <a href=\"https:\/\/theconversation.com\" target=\"_blank\" rel=\"noopener\">The Conversation<\/a> under a Creative Commons license. Read the <a href=\"https:\/\/theconversation.com\/as-key-trade-talks-start-the-us-mexico-relationship-will-likely-limp-along-but-at-a-cost-285112\" target=\"_blank\" rel=\"noopener\">original article<\/a>.<\/p>\n\n\n\n<\/div>\n\n\n  <\/div><\/div>\n\n\n\n  \n        \n  \n    \n\n\n\n\n\n\n<div\n  class=\"cc--component-container cc--article-related-stories \"\n\n  \n  \n  \n  \n  \n  \n  >\n  <div class=\"c--component c--article-related-stories\"\n    \n      >\n\n    \n  <div class=\"inner-wrapper\">\n              \n<div class=\"f--field f--section-title\">\n\n    \n  <h2>\n          Related Articles\n      <\/h2>\n\n\n<\/div>\n    \n                  <article>\n              \n<div class=\"f--field f--cta-title\">\n\n    \n  <h3>\n          <a href=\"https:\/\/dornsife.usc.edu\/news\/stories\/senator-gary-peters-to-lead-usc-dornsife-center-for-the-political-future\/\" \n                        class=\"\" \n      >U.S. Sen. Gary Peters to lead USC Dornsife\u2019s Center for the Political Future, named Warschaw Chair<\/a>\n      <\/h3>\n\n\n<\/div>\n        <\/article>\n              <article>\n              \n<div class=\"f--field f--cta-title\">\n\n    \n  <h3>\n          <a href=\"https:\/\/dornsife.usc.edu\/news\/stories\/annie-dillard-brought-poetry-into-prose\/\" \n                        class=\"\" \n      >Annie Dillard brought poetry into prose<\/a>\n      <\/h3>\n\n\n<\/div>\n        <\/article>\n              <article>\n              \n<div class=\"f--field f--cta-title\">\n\n    \n  <h3>\n          <a href=\"https:\/\/dornsife.usc.edu\/news\/stories\/four-new-life-sciences-departments-showcase-usc-dornsifes-strengths-in-biology\/\" \n                        class=\"\" \n      >Four new life sciences departments showcase USC Dornsife\u2019s strengths in biology<\/a>\n      <\/h3>\n\n\n<\/div>\n        <\/article>\n            <\/div>\n\n\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Even though Mexico is the U.S.\u2019s top trade partner, the fate of the pact underpinning that relationship is uncertain, argues USC Dornsife political scientist Pamela Starr.<\/p>\n","protected":false},"author":14,"featured_media":28301,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[50],"tags":[87,185,119,83],"class_list":["post-28300","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics","tag-expert-viewpoint","tag-mexico","tag-political-science-and-international-relations","tag-the-conversation"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>As key trade talks start, the US\u2011Mexico relationship will likely limp along \u2013 but at a\u00a0cost<\/title>\n<meta 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