USMCA Round Three: The Good, The Bad, and The Ugly

The third round ended with a joint statement, a fourth round scheduled for September, and the most consequential development yet on China. But the process is still harder than the progress.

Secretary Ebrard and Ambassador Greer met at the Economy Ministry’s executive offices on Pachuca 189 and Palacio Nacional for another round of USMCA extension talks, July 21 to 23. Here is the good, the bad, and the ugly in what was a good round inside a hard process. Unlike the spaghetti western, this one isn’t riding off into the sunset anytime soon.

The good is procedural. Three days of negotiations ended with President Sheinbaum and Economy Secretary Ebrard receiving USTR Jamieson Greer, a statement was issued (no major differences between the Spanish and English versions this time), and a fourth round of talks is now scheduled for Washington in September. Ebrard said the U.S. list of irritants has fallen from 54 to 14. Mexico arrived having already banked goodwill by moving early on deforestation-linked avocados, cross-border wastewater, and intellectual property rights, and USTR acknowledged the progress.

The most consequential development is on China. USTR reportedly asked Mexico to consider imposing Section 232-style duties on steel and aluminum originating outside North America, building a common external wall while preserving preference inside it. Rates and product coverage are likely still under discussion, with a framework targeted for the end of the year. I will do a deeper dive into how these interim agreements could look in the coming weeks. This would follow the Fortress North America logic: open within, secure at the perimeter. If it holds, it would be the closest thing yet to a shared North American posture toward China, and a genuine strategic prize buried inside an otherwise defensive review. But progress on common economic security measures will ultimately depend on carrots: tariff relief for Mexico and joint safeguards against potential Chinese retaliation.

In a Senate Finance Committee hearing, Ambassador Greer revealed what amounts to USTR’s strategy for the remainder of the process. It is a two-step negotiation. First, he wants interim deals with both Mexico and Canada before the end of this year, clearing the outstanding irritants and building enough momentum to move forward. The harder questions, rules of origin, labor, and environment, get pushed into 2027. What that means is clear: we are closer to a framework than to a finished review, the tariffs that brought Mexico to the table are still on, and any near-term deal will be partial by design and will be built to create additional leverage.

🔒 If you’re tracking the USMCA review from the communiqués alone, you’re missing the automotive paradox Washington can’t solve, an agriculture escalation that could derail the September round before it starts, and the reason Canada was deliberately left out of this one. The rest of this piece is for paid subscribers.