Mexico and the United States are pursuing a bilateral trade agreement before American voters go to the polls in November, effectively narrowing the USMCA (North American trade agreement) six-year review from a three-country process to direct negotiations between the two nations. Talks since May have made what both sides call steady progress, with a fourth round scheduled for September in Washington. The United States wants higher North American content requirements for vehicles eligible for tariff-free sales, while Mexico seeks relief from Section 232 tariffs (U.S. tariffs imposed on certain imports under national-security rules) affecting steel, aluminum and automobiles. The negotiations are also expected to address Chinese companies routing goods through Mexico to reach the U.S. market. The urgency is underscored by Mexico's record $196.9 billion goods trade surplus with the United States in 2025, including a $102.6 billion surplus through June 2026 and $26.31 billion in July alone. Canada has been largely excluded from the serious talks after parallel discussions with Washington stalled. The United States declined a 16-year extension on July 1, activating annual USMCA reviews through 2036. Any agreement could reduce manufacturers' input costs if Section 232 tariffs are eased, while tougher regional-content rules could raise short-term costs and redirect investment toward North American production. Both countries have expressed optimism about an interim arrangement by late 2026, although some complex issues may remain unresolved until 2027.