Mexico and EU must sign agreement to protect themselves from Trump tariffs

Mexico and the European Union are expected to sign, this Friday (22), a free trade agreement that had already been postponed, in an attempt to reduce dependence on the United States and partially protect themselves from tariffs imposed by North American President Donald Trump.

The agreement, on which they reached a general consensus in 2025, but whose signature had been postponed, expands another trade agreement between Mexico and the EU made in 2000, which covered only industrial products. The new pact includes services, government purchases, digital commerce, investments and agricultural products.

Mexican President Claudia Sheinbaum, European Commission President Ursula von der Leyen and European Council President Antonio Costa are expected to sign the agreement in Mexico City at their first summit more than a decade ago.

"This summit means more than trade; it is a geopolitical declaration," said Kaja Kallas, the EU's foreign policy chief, on Thursday (21) in Mexico City, before the signing.

Both sides want to diversify their exports beyond the US.

The EU was hit with sweeping new tariffs under Trump's April 2025 "Liberation Day" tariffs and prepared countermeasures, although they were suspended while both sides pursued negotiations.

Although tensions eased somewhat with a tariff truce and agreement in July, US tariffs on EU exports remain high.

Mexico has also been hit by heavy US tariffs on auto, steel and aluminum exports and trade relations between the two countries have been volatile throughout Trump's second term.

Mexico's Ministry of Economy estimates that the new agreement could increase Mexican exports to the EU from around US$24 billion a year to US$36 billion by 2030. The EU exports around US$65 billion worth of goods annually to Mexico.

Trade between Mexico and the EU grew 75% in a decade, dominated by transport equipment, machinery, chemicals, fuels and mining products.

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The new agreement provides tariff-free access for almost all products, including agricultural products such as Mexican chicken and asparagus and European milk powder, cheese and pork, albeit with some quotas.

Although the updated trade agreement was already ready, it took more than a year to be signed. The EU has prioritized a free trade agreement with the South American bloc, Mercosur, and has concluded free trade negotiations with Indonesia, India and Australia over the past eight months.

Mexico, for its part, has been cautious about taking steps that could anger the Trump administration during the delicate negotiations to extend the trade pact between the US, Mexico and Canada. Currently, more than 80% of Mexico's exports are destined for the USA.

In the EU, the trade agreement will be voted on by the European Parliament, which will probably approve it within a few months.

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Source: CNN