Mexico and EU Sign Landmark Trade Deal, Moving Away from US

Mexico and the European Union are set to sign a long-stalled free trade trade agreement in Mexico City on Friday, marking the first summit between the two parties in over a decade. Mexican President Claudia Sheinbaum, European Commission President Ursula von der Leyen, and European Council President Antonio Costa will sign the accord, which expands a 2000 Mexico-EU trade agreement that previously covered only industrial goods to now include services, government procurement, digital trade, investment, and farm produce. European Union foreign policy chief Kaja Kallas described the summit as "a geopolitical statement" beyond just trade, emphasizing both sides' desire to diversify exports away from the United States amid ongoing trade tensions with the Trump administration. Both parties have faced significant trade disruptions from U.S. tariffs. The EU was hit with sweeping duties during Trump's "Liberation Day" tariffs in April 2025, though countermeasures were paused during negotiations, and U.S. tariffs on EU exports remain elevated. Mexico has similarly faced stiff tariffs on automotive, steel, and aluminum exports, with trade relations between the two North American neighbors remaining volatile throughout Trump's second term. Mexico's economy ministry estimates the new agreement could increase Mexican exports to the EU from approximately $24 billion annually to $36 billion by 2030, while the EU currently exports around $65 billion in goods to Mexico each year. The new deal provides duty-free access for almost all goods, including agricultural products such as Mexican chicken and asparagus and European milk powder, cheese, and pork, albeit within certain quotas. The agreement has been ready for over a year but was delayed as the EU prioritized concluding trade deals with the South American bloc Mercosur, as well as Indonesia, India, and Australia. Mexico also exercised caution to avoid angering the Trump administration during sensitive negotiations to extend the U.S.-Mexico-Canada trade pact, with more than 80 percent of Mexico's exports currently going to the United States. The European Parliament is expected to approve the deal within a few months.