Will the U.S. and Mexico reach an interim USMCA trade agreement by the end of 2026?
We give a 37 percent chance that the U.S. and Mexico conclude an interim USMCA agreement by December 31, 2026, as of September 26. The list of U.S. demands has shrunk from 54 to 14, but Washington's demand for 50 percent U.S. content in cars remains unresolved, and every earlier Mexico deal deadline passed without a deal.
Why it matters: Mexico is the largest U.S. trading partner, and a deal or a stalemate decides the tariff and rules-of-origin terms behind American car prices, farm exports and border factory jobs.
TPG forecast
37%
Unlikely
Possible, but the autos fight likely slips to 2027
Version 1: 37% (range 25% to 50%) · Kalshi 36%
Evidence cutoff Sep 26, 2026 · published Sep 26, 2026 · Possible, but the autos fight likely slips to 2027
This forecast is on its first version. Each update adds a point; old versions are never edited.
The numbers behind the call
54 to 14
U.S. demands on Mexico still unresolved after three rounds, down from 54[2]
$196.9 billion
record U.S. goods trade deficit with Mexico in 2025, up 15 percent from 2024[1]
42 percent
of all U.S. imported auto parts come from Mexico[3]
25% and 50%
U.S. tariffs on Mexican autos and on steel and aluminum that Mexico wants eased first[4]
90 Day
window Trump set in July 2025 to sign a Mexico deal, which passed without one[6]
What it means for you
Car buyers and auto workers
Mexico supplies 42 percent of the auto parts the United States imports. An interim deal could ease the 25 percent Section 232 auto tariff on Mexican vehicles and parts; a stalemate keeps those costs in sticker prices and leaves new plant investment on hold.
U.S. farmers
Two-way U.S.-Mexico farm trade hit $74.5 billion in 2025, and Mexico is the top buyer of U.S. corn. A deal would lock in market access and biotech rules; drawn-out talks keep that exposure uncertain.
Grocery shoppers
Avocados, tomatoes and beef from Mexico enter duty-free under USMCA. The agreement stays in force either way, but a breakdown in talks raises the risk of new tariffs on food imports.
Manufacturers and importers
Without a deal the USMCA stays in force but on an annual review clock, which makes long-term supply contracts harder to sign. Steel and aluminum users would benefit if a deal trims the 50 percent metals tariff on Mexican supply.
Investors
A deal would reduce risk premiums on the Mexican peso and on companies with North American supply chains; a rupture would do the opposite.
The read
Three lenses, always in this order. How the method works.
01
Psychology
What do the decision makers need?
President Sheinbaum needs a deal that removes the 25 percent auto and 50 percent metals tariffs without conceding a U.S.-specific content rule that would hollow out Mexico's car industry, which exports most of its output north. Her public line since 2025 has been steady optimism paired with refusal to publish terms, which lets her claim progress without paying the domestic cost of concessions until a package is final.
Washington's side is split between a trade agenda and a security agenda. Ambassador Greer has said he would love arrangements with Mexico and Canada by year end, but he has also tied progress to issues outside trade, down to water deliveries under a 1944 treaty. Trump's record with Mexico is to extend deadlines after calls with Sheinbaum rather than sign, while using harsher treatment of Canada as a warning. An interim deal is the kind of win he likes before or just after the November 3 midterms, but only if it can be sold as a U.S. victory on autos or the deficit.
02
History
What happened the last times this came up?
Reference class: Trump-era deadlines for a U.S.-Mexico trade deal. The 90-day window Trump opened on July 31, 2025 ended in late October with only an extension of a few more weeks; that extension also ended without a deal; and the July 1, 2026 joint review ended with the United States declining to renew. That is 0 of 3.
The closest analogue is the 2018 NAFTA renegotiation, when the United States and Mexico reached a bilateral preliminary deal in August 2018 after about a year of talks and missed target dates, and Canada joined weeks later. It suggests a U.S.-Mexico bilateral text can come first and fast once autos are settled. It breaks because in 2018 both sides wanted to finish before Mexico's new president took office, a hard external deadline that does not exist in 2026, and because the current U.S. demand for 50 percent U.S.-specific content goes well beyond the 2018 labor-value rule.
03
Statistics
Base rate, adjustments, the number.
Base rate: 0 of 3 Mexico deadlines produced a deal. With a small-sample adjustment of one success and one failure added, that is 1 of 5, or 0.20. Adjustment up 12 points: this goal is an interim agreement that by design defers the hardest issues, the open list is down from 54 items to 14, and Sheinbaum said after a September 16 call with Trump that an agreement is advancing. Adjustment up 5 points: a year-end target set by the chief U.S. negotiator in Senate testimony carries some reputational weight.
Net: 0.20 plus 0.12 plus 0.05 is 0.37. That sits right at the Kalshi midpoint of about 0.36. We hold the range wide, 0.25 to 0.50, because the fourth negotiating round, reported for September 28 to 29, will reveal quickly whether the autos gap has narrowed.
Between the lines
What people spent versus what they said, and what was left out.
Cheap talk
After a September 16 call with Trump, Sheinbaum said a Mexico-U.S. agreement is advancing well but declined to release any terms.
In October 2025 she said Mexico was practically closing the issue, and eleven months later there is still no text. Presidential optimism about this file has been cheap; watch for a signed document or a USTR fact sheet instead.
Sequencing
The fourth U.S.-Mexico round, expected the week of September 21 in Washington, was reported pushed to September 28 to 29, and Mexico's Economy Ministry said the date was not confirmed.
Slipping dates usually mean the principals have not yet agreed on what the round is supposed to close. It is consistent with autos still being open.
Costly signal
Washington hit Canada with 50 percent Section 338 tariffs and import bans on some Canadian goods, while USMCA-qualifying Mexican goods stayed exempt from the new Section 301 tariffs.
The contrast is a deliberate signal that Mexico is the preferred partner and a warning of the alternative. It raises the cost to Mexico of walking away, which modestly favors an interim deal, but it also shows Washington is willing to escalate rather than compromise.
What was left out
Greer's public list for a Mexico deal includes non-trade items such as compliance with the 1944 water treaty.
When a trade deal is tied to water deliveries and security cooperation, the trade ministers alone cannot close it. That makes timing depend on leader-level bargaining, which has repeatedly produced extensions rather than signatures.
Base rate
20%
small-sample adjusted rate: 0 of 3 Trump-era Mexico deal deadlines produced a deal[6][5][7]
Computed by TPG from the July 31, 2025 90-day window, the late October 2025 extension of a few more weeks, and the July 1, 2026 joint review, then adjusted to 1 of 5 with one added success and failure. (n = 3)
Closest historical parallels
U.S.-Mexico preliminary deal in the NAFTA renegotiation (2018)
Alike: Bilateral U.S.-Mexico talks, autos rules of origin at the core, Canada on a separate and more hostile track.
Outcome: A U.S.-Mexico preliminary agreement came in late August 2018 after about a year of talks; Canada joined about a month later and USMCA was signed that November.
Where it breaks: Mexico's outgoing government had a hard deadline before its December 2018 handover; no comparable forcing date exists now.
Trump's 2025 framework deals with the UK, Japan and the EU (2025)
Alike: Short framework texts announced by leaders that deferred details, often within weeks of a tariff deadline.
Outcome: Frameworks were announced quickly, then filled in over months.
Where it breaks: Those deals mainly traded tariff rates; the Mexico talks hinge on rules of origin that reshape factory footprints, which is much harder to paper over.
How it could play out
Every path we see, sized by probability. Paths that resolve YES add up to our 37%.
- Talks roll into 2027 without a deal No53%
The 50 percent U.S.-content demand stays unresolved and both sides extend talks toward the next annual review on July 1, 2027.
- Interim deal announced in November or December Yes27%
Post-midterm bargaining trades partial Section 232 relief for tighter content or China-related rules, meeting Greer's year-end goal.
- Interim deal announced before the midterms Yes10%
The late-September round closes autos and metals and Trump announces a framework in October.
- Talks rupture No10%
A security, water or migration dispute prompts new U.S. tariffs on Mexico or a suspension of talks.
What would change our number
USTR publishes a readout of the fourth round that says autos rules of origin were resolved or narrowed
+12 pointsTrump adjusts Section 232 tariffs on Mexican autos or metals
+10 pointsNo fifth round is scheduled by the end of October
-8 pointsTrump threatens new tariffs on Mexico over cartels, migration or water deliveries
-10 pointsTPG 37% vs Kalshi 36%
Kalshi's U.S.-Mexico interim agreement contract, which also requires a written agreement before January 1, 2027, has a 0.31 bid and 0.41 ask. We are one point above the midpoint: we agree with traders that the hard autos issue probably slips, and we see no evidence to diverge.
Market price recorded September 26, 2026 from Kalshi. Analysis, not investment advice.
How this question resolves
Resolves YES if, between September 26, 2026 and December 31, 2026 (U.S. Eastern time), the United States and Mexico announce that they have concluded a written interim, framework or final agreement arising from the 2026 USMCA review that sets at least one new or revised commitment on how the USMCA operates or on trade between the two countries, confirmed by USTR or the White House and by Mexico's Secretaria de Economia or presidency. Announcements of further negotiating rounds, statements that talks are progressing, or a pause or cut in unilateral tariffs with no written agreement do not count. Resolves NO otherwise.
Closes: December 31, 2026. Judged by: USTR and White House releases, Mexico's Secretaria de Economia, and Reuters or AP reporting
Questions people ask
What happened at the USMCA review in July 2026?
+
At the mandatory joint review on July 1, 2026, the United States declined to renew the USMCA for another 16 years, while Mexico and Canada were ready to extend it. The agreement stays fully in force but now faces annual reviews and would expire in 2036 unless all three countries agree to renew it.
Will the US and Mexico make a trade deal in 2026?
+
As of September 26, 2026, TPG gives a 37 percent chance that the two countries conclude a written interim USMCA agreement by December 31. The open list of U.S. demands has shrunk from 54 to 14, but Washington's call for 50 percent U.S. content in Mexican-built cars remains the main obstacle.
Is USMCA ending?
+
No. The United States declined to renew USMCA in July 2026, but that does not end it. Its tariff preferences, rules of origin and dispute settlement remain in force, and it only expires on July 1, 2036 if the three countries never agree to extend it. Any member can still withdraw with six months' notice.
What tariffs does the US have on Mexico?
+
Goods that qualify under USMCA rules still enter duty-free. Mexico also faces U.S. Section 232 tariffs of 25 percent on autos and 50 percent on steel and aluminum, which Mexico wants eased before it agrees to other U.S. demands in the review.
Sources
Every source is dated on or before the September 26, 2026 evidence cutoff. Nothing published later was used.
- [1]Tracking the U.S.-Mexico Talks in the USMCA Review. Americas Society/Council of the Americas, Jul 30, 2026.
“the U.S. goods trade deficit with Mexico, which reached a record $196.9 billion in 2025, up 15 percent from 2024.”
- [2]USMCA September 2026 Update: What Manufacturers Need to Know. Prince Manufacturing, Sep 4, 2026.
“Mexico and the U.S. have knocked a 54-item list down to 14.”
- [3]Tracking the U.S.-Mexico Talks in the USMCA Review. Americas Society/Council of the Americas, Jul 30, 2026.
“accounting for 42 percent of all U.S. imported auto parts”
- [4]Mexico, US Set Fourth Round of USMCA Review Talks for September. Mexico Business News, Jul 27, 2026.
“Mexico seeks relief from 25% auto and 50% steel/aluminum tariffs before advancing other issues”
- [5]Mexico's Sheinbaum says she and Trump agreed to extend trade deadline. Al Jazeera, Oct 27, 2025.
“adding that the two countries were aiming to resolve 54 outstanding trade barriers.”
- [6]Trump extends Mexico's 25% tariffs for 90 days as talks continue. CNBC, Jul 31, 2025.
“with the goal of signing a Trade Deal somewhere within the 90 Day period of time, or longer”
- [7]Ambassador Greer Issues Statement on the USMCA Joint Review. Office of the U.S. Trade Representative, Jul 1, 2026.
“The United States did not agree to renew the USMCA in its current form.”
- [8]Tracking the U.S.-Mexico Talks in the USMCA Review. Americas Society/Council of the Americas, Jul 30, 2026.
“Greer signaled a goal of interim agreements with Mexico and Canada by the end of the year”
Version history and integrity
Published forecasts are never edited. When the evidence changes we publish a new version beside the old one, each locked with a sha256 hash of its full contents. When this question resolves it is scored in public on our track record.
| Version | Cutoff | Forecast | Lock hash |
|---|---|---|---|
| v1 | Sep 26, 2026 | 37% Unlikely | 5ac1b9bcdd4f9672e3ff92f58951aead2c46a1cbfd184e53b693fd490fa46813 |
Download every forecast: JSON or CSV (CC BY 4.0). Public sources only. Analysis, not investment or legal advice.
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