Why It Matters
A Congressional Research Service (CRS) report updated September 23 examines the full U.S.-Mexico bilateral relationship under the Trump administration and Mexican President Claudia Sheinbaum, identifying the United States-Mexico-Canada Agreement (USMCA) review as the most consequential near-term issue.
At the July 1 USMCA joint review, the Trump administration declined to renew the agreement in its current form, while Mexico and Canada expressed a desire to renew. The agreement remains in effect through 2036 but is now subject to annual reviews, and the administration has stated it may conclude an interim arrangement on some issues by the end of.
The legal toolkit for applying trade pressure has also narrowed after the Supreme Court struck down the administration's International Emergency Economic Powers Act tariffs in February, and Section 122 tariffs expired in July after a court ruled the statutory criteria were not met. The administration is now relying primarily on Section 232 and Section 301 authorities.
The Big Picture
The 119th Congress has been active on Mexico-related oversight. The FY2026 National Defense Authorization Act (NDAA), enacted as Public Law 119-60, required reports, plans, and strategies to track Mexico's efforts against illicit synthetic drugs and to improve joint training and security cooperation. The FY2026 National Security, Department of State, and Related Programs Appropriations Act withholds non-fentanyl-related foreign aid to Mexico until the Secretary of State certifies that Mexico is delivering water owed to the United States under a 1944 Water Treaty, and withholds 30 percent of counterdrug assistance until Mexico's antidrug efforts are certified.
Eight Mexican drug cartels have been designated as Foreign Terrorist Organizations (FTOs) by the Trump administration, yet Mexico is not a member of the Americas Counter Cartel Coalition launched in March with 16 countries, a notable gap given that the report identifies Mexico as the primary source country for U.S.-bound synthetic drugs, including fentanyl.
Trump administration policies produced a reported 93.5 percent reduction in migrant encounters at the southwest border from January through July compared to the same period in 2024. Mexico received nearly 271,193 deported Mexican nationals between January 20, 2025, and August 13, and Sheinbaum has criticized deaths of Mexican nationals in U.S. custody and the removal of Mexicans to third countries.
On trade, 87 percent of U.S. imports from Mexico entered under USMCA by June, up from 46 percent in January 2025, as businesses moved to claim duty-free status. Mexico responded to U.S. pressure on China-linked supply chains by imposing 50 percent tariffs on more than 1,000 products from non-free-trade-agreement countries in December 2025, and Sheinbaum submitted legislation in August to establish a foreign investment screening mechanism similar to the U.S. Committee on Foreign Investment in the United States.
The Bottom Line
Among the congressional options ahead are weighing whether potential USMCA revisions require legislative approval, examining how U.S. tariffs have shaped bilateral trade flows, and deciding whether to codify, terminate, or modify the tariffs and their underlying authorities. Sheinbaum's planned attendance at the Asia-Pacific Economic Cooperation summit in Shenzhen in November for a potential bilateral meeting with President Xi Jinping adds a China dimension that congressional overseers will need to monitor as USMCA negotiations continue.
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