• President Trump announced a 90-day extension for trade negotiations with Mexico.
• Tariffs of 25% on cars and 50% on steel will remain during this period.
• The extension helps avoid an impending 30% tariff on non-compliant imports.

U.S. President Donald Trump declared a 90-day negotiating period with Mexico following a successful phone call with Mexican President Claudia Sheinbaum. The arrangement aims to foster dialogue and create a long-term trade deal while maintaining existing tariffs. Trump confirmed that the current rates of 25% on passenger vehicles and 50% on steel, aluminum, and copper imports would continue during the negotiation period, tied to trade concerns and fentanyl trafficking rates, according to AA, South China Morning Post, and LA Times.

Mexican President Sheinbaum emphasized the significance of their conversation, indicating that the agreement allowed Mexico to avert a looming increase in tariffs planned for August 1st. Both leaders expressed optimism, with Trump noting that this ongoing negotiation would facilitate further cooperation on border security and trade, according to NPR, Al Jazeera, and India Times.

Trump reiterated that this negotiation period would help resolve existing trade imbalances, which reportedly reached $171.5 billion last year, highlighting the growth of U.S. imports from Mexico since the enactment of the USMCA. The agreement will permit some goods to remain duty-free, as approximately 85% of Mexico's exports adhere to the USMCA's rules of origin, shielding them from increased tariffs, according to Reuters and HuffPost.

Despite the 90-day reprieve, existing tariffs will remain in effect, including a 25% tariff on non-USMCA-compliant goods. Trump's ongoing negotiations with other trading partners indicate a broader reevaluation of U.S. trade agreements, where he has threatened higher tariffs on nations that do not finalize negotiations by the looming deadlines, as noted by Reuters and TRT Global.