SAM DINGMAN: The U.S. and Mexico will meet next week to begin talks on the USMCA, the trade agreement that governs much of the economic relationship between the two countries as well as Canada. The USMCA is one of the major reasons that trade with Mexico has remained relatively steady in spite of the broader uncertainty created by President (Donald) Trump's ill-fated tariff policy.
But next week's meeting will put the agreement and the diplomatic relationship between the U.S. And Mexico under a microscope. Joining us now from Hermosillo to break this all down is KJZZ's Nina Kravinsky.
Nina, good morning.
NINA KRAVINSKY: Good morning.
DINGMAN: So Nina, the USMCA — which stands for United States, Mexico, Canada Agreement — is a pretty significant treaty. Tell us what it is and why people in Arizona should be paying attention to these talks.
KRAVINSKY: Yeah, so like you hinted too, the USMCA is this trade deal that binds the U.S., Mexico and Canada. And the previous Trump administration, around eight years ago actually negotiated this deal to replace NAFTA. And like NAFTA, it keeps most of the goods that flow between these three countries — the US, Mexico and Canada — tariff free.
So to sort of zoom in and look at examples from our region, I'm here in Sonora, which produces lots of stuff that gets shipped over the U.S.-Mexico border into Arizona. Things like metals and aircraft parts, but also tons of farms here that produce low-cost produce that get shipped to Arizona and the rest of the U.S. And part of the reason that that produce — stuff like cucumbers, peppers, tomatoes — is priced the way that it is is because it enters the U.S. tariff-free.
So one expert that I talked to put it this way: People in the U.S. have had this free trade relationship with Mexico and Canada for so long that a lot of people don't really even notice it or think about it anymore on their day-to-day. She said to lose that would be pretty disruptive to a lot of our supply chains.
DINGMAN: Very interesting. Well, you and I have talked before, Nina, about the unique way that President Trump has navigated his relationship with President (Claudia) Sheinbaum. They've had a relatively warm dynamic compared to his relationship with other U.S. trading partners. But we also know the president is coming off a serious rebuke of his trade policies at the Supreme Court.
What has he said about the USMCA, and how do you imagine he and the administration are going to approach these negotiations?
KRAVINSKY: Yeah, so like I mentioned, Trump's own administration actually negotiated this trade deal, the USMCA, that we have now. But during his campaign and during his first year in office, he sort of publicly flirted with this idea of leaving the treaty or completely redrawing in some major way. Unlike NAFTA, USMCA has this clause that it needs to be reviewed every six years.
And so now this upcoming July, it's up for its first review. Mexico and the U.S. are set to start these talks next week. It's sort of kind of like preparatory work before any potential big renegotiation this summer. But it's still too soon to say how this will all pan out. Certainly all three countries are going to try to extract concessions and make the deal work for them.
We've seen, of course, very protectionist measures from the Trump administration, like you said, during his first year of his second term. Lots of new tariffs, some of which were recently struck down by the Supreme Court. But the goal of those tariffs, at least partially, is sort of to restore domestic manufacturing in the U.S.
We've heard Trump call for the return of automaking in the U.S. And many of those plants over the past 30 years have moved to Mexico.
DINGMAN: So that gives us kind of a perspective on a lot of what's at stake here for President Trump in the United States. What is the significance of this deal for Mexico and its economy? And I guess while we're at it, what's at stake politically for President Sheinbaum?
KRAVINSKY: Yeah, totally. I mean, this deal is huge in Mexico. Mexico is a pretty export-heavy economy, specifically exports to the U.S. So they're invested in keeping the USMCA intact. The Mexican government recently consulted with these business leaders across its main sectors and found that more than 80% of them do have a favorable view of USMCA.
But a complete dismantling of the USMCA would likely have consequences for a lot of people in Mexico — not just business owners, but farm laborers and factories workers, too. So Mexican President Claudia Sheinbaum has a lot at stake in keeping the trade treaty in place.
DINGMAN: An 80% approval rating, a rare sight in politics these days. Well, are there any clues, Nina, that you're looking for in the coming days in terms of how the sides are communicating?
KRAVINSKY: Yeah. So, right now, the people talking are trade delegations from each country. They're going to most likely focus on sort of more in-the-weeds details like rules of origin for manufactured goods, that kind of thing.
But in the Trump administration, a lot can ride on the president's personal relationships with other world leaders. And it's worth noting that Trump and Canada's Mark Carney have had a rocky relationship these past couple.
DINGMAN: They certainly have.
KRAVINSKY: But we've seen Sheinbaum's relationship with Trump has been a little bit different. It's actually mostly been pretty good. We've seen Sheinbaum walking this fine line since Trump first said before his inauguration that he would put big tariffs on Mexico and Canada. She has to keep these lines of communication between her and Trump open without seeming to her constituents like she's pandering or catering to him.
So, she's taken what she calls a "cabeza fria" approach. She's keeping a cool head and just waiting for things to play out before reacting to them. So far, that's actually really seemed to work for her. Mexico did get slapped with some new tariffs for some things like steel and aluminum, but it was able to avoid a lot of the worst of Trump's serif threats last year.
And Trump also in the past has tied tariffs to other seemingly non-trade issues, primarily drug trafficking. So as we near the summer review period, we might see the Trump administration bring up cartels and fentanyl trafficking in these negotiations to try to get concessions from Mexico. This is where Mexico's recent killing of that major drug lord El Mencho could prove helpful in negotiations.
It's the sort of thing that Trump could look at and see a victory — or at least a Mexico that's willing to go to bat against cartels. Obviously, Sam, on the other hand, a lot can happen between now and July, so we could find ourselves in a completely different world by then.
So yeah, I have a feeling that I'll be back on to talk with you about this again soon.
DINGMAN: Well, we will look forward to that. That is KJZZ's Nina Kravinsky reporting from Hermosillo. Nina, thank you.
KRAVINSKY: Thanks, Sam.
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