U.S. and Mexican trade negotiators have hit an impasse over tariffs on steel, aluminum, and automobiles, with talks now unlikely to yield a deal before the November 3 midterm elections.

The breakdown centers on U.S. Section 232 tariffs, including 50 percent duties on steel and aluminum imports from Mexico and 25 percent on certain automobiles. Commerce Secretary Howard Lutnick opposed major cuts to these levies, according to people familiar with the discussions. A U.S. counter-proposal failed to address Mexican concerns about relief on metals and derivative products.

Mexican officials had pushed for lower tariffs in exchange for concessions on automotive content rules and limits on Chinese investment. Earlier optimism for an interim agreement faded in recent days as positions hardened.

Mexico's President Claudia Sheinbaum acknowledged substantial progress in comments Tuesday but confirmed no final pact had been reached. The U.S. side has signaled comfort with delaying any agreement well past the midterms to maintain leverage.

The stalled talks form part of ongoing efforts tied to the U.S.-Mexico-Canada Agreement review. Washington seeks to narrow the substantial trade deficit with Mexico, which exceeded $276 billion in the first eight months of 2026. American negotiators view the tariffs as essential tools for protecting domestic manufacturing and addressing national security concerns.

Both sides continue to describe the dialogue as active, though sources indicate the next round has been postponed. The impasse highlights tensions in bilateral trade policy as the Trump administration prioritizes fairer terms and reduced imbalances over rapid concessions.