Commerce Secretary Howard Lutnick has blocked a tariff deal with Mexico that would have cut American levies on steel, aluminium, and vehicles. The move stalls negotiations that appeared close to completion and marks the second time Lutnick has disrupted advanced trade talks with a North American partner.
Negotiations between the US and Mexico over tariff reductions have stalled following opposition from Commerce Secretary Howard Lutnick, according to a Wall Street Journal report on 15 October 2026.
The two countries had been working toward an agreement that would lower American tariffs on steel, aluminium, and automobiles. In exchange, Mexico would have offered concessions to the US. The deal appeared close in recent weeks, with Mexican officials and business leaders describing progress as nearly complete.
This follows the US and Mexico holding their fourth round of negotiations in early September 2026 to revamp the 26-year-old USMCA. US Trade Representative Jamieson Greer met with Mexican President Claudia Sheinbaum and Economy Minister Marcelo Ebrard to discuss vehicles, steel, aluminium, labour standards, and agricultural trade within the bloc’s USD 1.6 trillion annual commerce.
Lutnick’s opposition blocks the deal
The Commerce Department, under Lutnick’s leadership, manages tariffs imposed on national-security grounds. Lutnick has refused to support major reductions in the 25% tariff on Mexican automobiles or the 50% levies on steel and aluminium imports. He has also blocked plans to lower tariffs on finished products made from these materials.
This represents the second occasion on which Lutnick has disrupted advanced trade negotiations with a North American country. His recent involvement marks a shift in influence. For much of 2026, Trade Representative Jamieson Greer held the leading role in Trump’s trade agenda, with Lutnick largely sidelined.
What comes next
The Commerce Department said it remains in constant dialogue with Mexico on trade matters. Mexico’s deputy trade minister, Luis Rosendo Gutierrez, told the Journal that progress continues despite the reported stall.
Mexican and American negotiators had viewed this agreement as a pathway to broader discussions on renewing the US-Mexico-Canada Agreement (USMCA).
