Moody's Warns Energy, Autos, and Steel Complicate USMCA July Deadline

Moody's warned on June 16, 2026 that the energy chapter is the most complex element in the review of the United States-Mexico-Canada Agreement (USMCA): the state participation model in the sector, the ratings agency noted, represents the primary friction point with Washington's demands for non-discriminatory market access.

The second round of bilateral Mexico-U.S. negotiations took place on June 16 and 17, with July 1 as the formal treaty review date. El Universal reported that Moody's expects the process to produce bilateral agreements between Mexico and Washington rather than preserving the original trilateral framework, given that Canada does not appear on the announced meeting schedule. For Mexico, the implications are immediate: approximately 90% of trilateral trade benefits from USMCA provisions, and qualifying products are exempt from several tariffs recently imposed by Washington. The agency flagged the risk that stricter conditions could delay agreements and erode Mexico's medium-term investment, trade, and growth outlook.

Moody's identified three sectors with the lowest probability of a deal in this renegotiation: energy, automobiles, and steel. For the automotive sector, the agency pointed to stricter rules of origin and global tariffs of 25% as the main risk factors. Mexican steel faces 50% tariffs under Section 232 of U.S. legislation. In energy, the central obstacle is the state participation structure, which Moody's identified as the primary conflict point with Washington's demands for market opening. Forbes México reported that the treaty review will be volatile in character, though the agency maintained as its baseline scenario that the agreement will not be abandoned entirely.

The week of July 20 is shaping up as the next inflection point in negotiations, according to the timeline reported by El Universal. Long-term contracts in the energy sector will remain in a state of regulatory uncertainty until the most sensitive chapters reach a formal close.

This article was produced with artificial intelligence assistance based on verified sources and reviewed by a human editor before publication.