Mexico weighs tougher trade rules for China, as US talks grind on

Mexico is weighing plans to impose further trade restrictions on selected products from China and other countries while raising existing import taxes on others, according to four people familiar with the matter. The measures would deepen Mexico's alignment with Washington as President Claudia Sheinbaum pursues a multi-year extension of the North American trade pact known as the USMCA, while also supporting her push to grow domestic manufacturing at a time of lacklustre investment at home.

Mexico's economy and finance ministries are evaluating which products not currently covered by a bilateral trade deal might face new duties, and which could be subject to higher rates. Steel products and vehicles are among the leading candidates, according to one of the people.

There is currently no concrete plan or proposal to implement new tariff adjustments, the economy ministry said in a statement. The ministry, which oversees foreign trade, said it is engaged in ongoing consultations with businesses similar to those that led to the design of a tariff package targeting Asian imports implemented earlier this year. It added that it would continue case-by-case investigations into alleged dumping of imports below their production costs, which could lead to the imposition of new duties.

Sheinbaum strikes optimistic tone

Mexican President Claudia Sheinbaum expressed optimism she can reach a trade deal with US President Donald Trump as her chief negotiator leads talks in Washington, just after negotiations between the US and Canada collapsed.

"As President Trump said, we hope to reach an agreement with the US," she told reporters on Monday after being asked about the escalating US-Canada impasse. "I'm optimistic an agreement can be reached."

Economy Minister Marcelo Ebrard, Sheinbaum's top trade negotiator, will remain in Washington for several days as he seeks to lower 50% US tariffs on Mexican steel and aluminum, and 25% duties on cars.

US-Canada impasse casts shadow

The six-year-old USMCA trade pact includes the US, Mexico, and Canada. Last month, it formally entered a phase of annual reviews.

Washington's negotiations with Ottawa fell apart in recent days, prompting Trump to say he will double tariffs on Canadian cars and parts starting next year. The breakdown also triggered a 50% US levy on about US$20 billion of Canadian goods, while Canadian Prime Minister Mark Carney announced retaliatory tariffs to take effect on September 8.