Mexico sends four fifths of its exports to the United States, most of them made in factories that exist because of a trade agreement in force since 1994. Since 2019 American presidents have used that dependence to obtain what they want on migration and drugs: Mexico holds back migrants, takes back deportees and extradites traffickers, and in return keeps most of its access. In July 2026 Washington declined to renew the agreement, which now continues subject to yearly review. Mexico's government says it will not sign a new one that costs it its sovereignty.
The wider relationship and each side's full account: Mexico and the United States.
Where it stands · September 2026
Mexico pressed the American commerce secretary on tariffs for its cars and steel. Sheinbaum's report put 11,000 troops at the northern border. The two countries began a joint operation against drones at the border. Sheinbaum said Mexico would not sign a USMCA deal that harms its sovereignty. Screwworm reappeared in New Mexico before a port reopening. Trade and security tensions rose on several fronts.
What the dispute is about
What the tariffs are for. They have been justified by fentanyl, by migration, by the trade deficit, by Chinese goods entering through Mexico, and by national security. Mexico says a partner cannot negotiate with a list that changes.
The agreement. It guaranteed that cars and parts could cross the border many times without duty. That guarantee is what brought the factories. A pact that must be renewed every year guarantees nothing to an investor.
Migrants. Mexico's National Guard now does the work of an American border force, and Mexico receives deportees who are not Mexican. It has complained about the deaths of its citizens in American custody and at the hands of immigration agents.
