Marco Rubio receives Roberto Velasco in Washington amid trade tensions

U.S. Secretary of State Marco Rubio received Mexican Foreign Minister Roberto Velasco in Washington on Wednesday, August 26, in a meeting focused on border security and bilateral cooperation. According to Infobae, Rubio called for decisive action to halt irregular migration, stop the flow of fentanyl and other illicit drugs into U.S. territory, and dismantle foreign terrorist organizations and cartels.

The meeting aimed to advance shared regional priorities, although both officials spoke to the cameras without taking questions on the trade war between the United States and Canada. The conflict casts doubt on the future of the USMCA trade agreement and keeps open the negotiations led in parallel by Mexico's Secretary of Economy, Marcelo Ebrard, in pursuit of a deal that would prevent the imposition of additional tariffs.

The diplomatic rapprochement comes amid mounting pressure on the Mexican economy. According to earlier reporting by Bloomberg Línea and verified by SurEconomics, the United States announced in July that it will not renew the USMCA and will opt for annual reviews, a decision that collapsed trade talks with Canada and increased uncertainty over the dialogue with Mexico. Along the same lines, S&P Global Ratings revised its outlook on Mexico to negative in May, while Moody's placed the country at the lowest level within investment grade.

For the region's productive and exporting sectors, the lack of certainty in trade rules makes financing more expensive and holds back medium-term investment decisions, passing the cost of geopolitical tension on to the exchange of goods and to industrial employment.

Authorities in both countries will have to determine in the coming weeks whether the room for bilateral negotiation can withstand the new policy of periodic reviews of regional trade.