The United States and Mexico will begin a third round of bilateral negotiations this week aimed at revising the U.S.-Mexico-Canada Agreement (USMCA), while Washington simultaneously imposes nearly $20 billion in new tariffs on Canadian products. The talks, scheduled to start in Mexico City on July 22, mark the first formal discussions since the Trump administration decided not to renew the six-year-old trade pact earlier this month. The decision is significant because it starts a process that could eventually lead to the expiration of the agreement unless the three nations reach a new consensus, potentially affecting industries ranging from agriculture to automotive manufacturing.

The renewed negotiations come at a time of rising concern over North America's competitive position in global markets. Mexico's ambassador to the United States, Roberto Lazzeri, warned that delays in reaching a new deal could lead to lost investment, declining market share, and weaker regional competitiveness. Industry groups have repeatedly emphasized that the trilateral framework and largely tariff-free market have been essential in supporting integrated supply chains and maintaining the region's economic strength. For U.S. agriculture, any disruption to trade flows could directly influence commodity prices, export demand, input costs, and long-term investment decisions.

Biologicals

Biologicals Gain Ground in Latin America, but Where Do They Really Fit in the Grower's Toolbox?

Agriculture and Supply Chains Face New Uncertainty

Agricultural trade is expected to be one of the key topics during the negotiations. Officials are expected to address issues related to steel, aluminum, labor standards, and agricultural market access, while also discussing broader concerns over economic security and China's growing influence in North America. The Trump administration has praised Mexico for avoiding retaliatory measures and for cooperating on export controls and environmental standards, including efforts to limit exports linked to illegally deforested land. Such measures could eventually influence sustainability requirements for agricultural producers throughout the region.

Another major point of contention involves efforts to strengthen regional production requirements. U.S. negotiators have proposed that 50% of the value of North American-built vehicles originate in the United States, a substantial shift from existing rules that could reshape manufacturing and logistics networks. These changes matter for agriculture because integrated supply chains affect transportation costs, machinery prices, fertilizer availability, and broader rural economic activity. Farmers and agribusinesses are already dealing with volatile commodity markets, elevated input costs, and uncertainty surrounding future trade policy.

The discussions also unfold against a backdrop of growing economic imbalances. According to U.S. Census Bureau data, the U.S. trade deficit with Mexico increased by $28 billion, or 17%, reaching $197 billion in 2025. Washington argues that previous tariffs on China encouraged companies to relocate supply chains to Mexico rather than return production to the United States. As negotiators attempt to redefine the future of North American trade, the outcome could have significant implications for crop exports, livestock markets, farm profitability, and long-term agricultural investment across the region.