US-Mexico tariff talks stall on steel and aluminum, and a Canada deal now looks set to wait until after the midterms

Trade talks between the United States and both of its USMCA partners have slowed, and tariff relief now looks unlikely before the U.S. midterm elections on Nov. 3.

Mexico: stuck on Section 232 metals tariffs

Bloomberg News, in a report published by Transport Topics on Oct. 21, said U.S. and Mexican negotiators have reached an impasse over steel and aluminum tariffs. People familiar with the talks said major progress may not come until after the midterms.

According to the report, talks cooled after U.S. officials, including Commerce Secretary Howard Lutnick, objected to Mexico's demands for lower duties on metals. A counterproposal from Lutnick did not address Mexico's concerns. The White House and the Commerce Department did not respond to requests for comment.

Mexico's ambassador to the U.S., Roberto Lazzeri, said on an Oct. 19 panel in Miami that the sticking point is the Section 232 tariffs. These include a 50% tariff on steel and aluminum and a 25% tariff on the non-U.S. content of USMCA-compliant cars. One key issue is tariffs on downstream products made from steel and aluminum, which now cover a large part of Mexico's economy.

Officials told Bloomberg that Mexico has been seeking a cut in U.S. tariffs on light vehicles to 15% from 25%, plus a lower metals rate. The two sides had not agreed on a new metals rate. Mexican Economy Minister Marcelo Ebrard rejected the suggestion that Lutnick was blocking a deal.

Both leaders still sound positive. President Donald Trump told a rally on Oct. 19 that the two countries were close to an agreement. Mexican President Claudia Sheinbaum said on Oct. 20 that there had been progress. More than 80% of Mexico's exports go to the United States.

Canada: "pens are down"

CBC News reported on Oct. 20 that Canadian officials have told industry groups they do not expect a Canada-U.S. deal before the midterms. Canada-U.S. Trade Minister Dominic LeBlanc confirmed to CBC that no deal is expected before then.

Talks broke down in late August. The Globe and Mail reported that Washington then imposed tariffs on about $20 billion of Canadian goods, and Ottawa responded with countertariffs on a similar amount of U.S. products. Prime Minister Mark Carney has said one reason he left the talks was Washington's refusal to give tariff relief to Canadian medium- and heavy-duty trucks.

On Oct. 22, Canada's chief negotiator, Janice Charette, told the Toronto Global Forum that there is no timeline for formal talks to resume. She said "pens are down and the doors are open." She also said the USMCA review and renewal process has not formally begun.

Trump has also posted that tariffs on cars, trucks, auto parts and steel will rise to 50% on Jan. 1, 2027. LeBlanc told CBC that the administration has not taken any official step to raise auto tariffs. Flavio Volpe, president of the Automotive Parts Manufacturers' Association, told CBC that industry has not seen any paperwork.

What it means for carriers

Vehicles, metals and machinery are among the highest-value goods crossing the border, according to the latest Bureau of Transportation Statistics figures, and Laredo, Texas; Detroit; and Port Huron, Michigan, are among the busiest crossings. While the tariffs stay in place and the talks drag on, shippers may hold off on investment decisions, and Bloomberg reported that some business leaders already are. Carriers that rely on automotive and metals lanes should watch for formal tariff notices before Jan. 1, not just political statements.