Presidents Sheinbaum and Trump will continue to discuss agreement on nontariff trade barriers.

The U.S. is extending a deadline to reach a trade deal with Mexico for several weeks, President Claudia Sheinbaum said, in what would be the latest reprieve Donald Trump has granted his neighbor from punishing tariffs. SANDY HUFFAKER - AFP via Getty Images

By MICHAEL O'BOYLE AND ALEX VASQUEZ | BLOOMBERG

The U.S. is extending a deadline to reach a trade deal with Mexico for several weeks, President Claudia Sheinbaum said, in what would be the latest reprieve Donald Trump has granted his neighbor from punishing tariffs.

Sheinbaum and Trump spoke briefly Saturday and agreed to extend talks to give the nations more time to reach a deal on nontariff trade barriers that are still under discussion, she said during her daily press briefing Monday.

Trump had set a Nov. 1 deadline to raise the fentanyl-related tariffs he imposed on certain Mexican goods to 30% from 25%. The levies apply to products that are not protected by the U.S.-Mexico-Canada trade agreement.

But Sheinbaum said there is "no situation, for now, in which there could be any special tariff on November 1," adding that they are close to a deal and had agreed to speak again in the coming weeks. The White House didn't immediately respond to a request for comment.

The Mexican peso surged to a session high after Sheinbaum's remarks, gaining as much as 0.5% against the dollar.

Her comments on progress in the discussions were "boosting market optimism over Mexico's relatively favorable position in the trade negotiations with the U.S., especially given its large exposure to the U.S. market," said Dan Pan, an economist at Standard Chartered Bank.

Trump has imposed tariffs on a range of imports from Mexico, including steel, aluminum and vehicles. But he's also shown a willingness to negotiate, repeatedly delaying the implementation of higher levies or exempting certain Mexican goods from them, decisions he's often made after conversations with Sheinbaum.

The apparent extension stands in contrast to Canada's dealings with Trump, who said Monday that he doesn't anticipate meeting with Mark Carney any time soon despite the prime minister's insistence that they're near a deal to lower metals tariffs.

The U.S. president halted trade talks with Canada last week in reaction to a TV advertisement by the province of Ontario that criticized his tariff regime. On Saturday, Trump said he would increase the import tax on goods from Canada by 10% due to the ad, although he didn't provide further details.

Sheinbaum, however, said that she and Trump agreed that talks between the U.S. and Mexico were going "very well," even on contentious topics like security and migration.

The Mexican leader has maintained her cool-headed approach throughout negotiations with Washington. She has also worked to shore up the relationship with the U.S., the destination of more than 80% of Mexico's exports.

Earlier this year, Sheinbaum submitted a plan to Congress that would impose tariffs of as much as 50% on products from countries with which Mexico has no trade agreement, particularly China. Lawmakers delayed discussion of the proposal until November.

Mexican Economy Minister Marcelo Ebrard has insisted that despite the current tariffs, Mexico is in a privileged position compared to other nations, since it doesn't have general levies and more than 80% of its exports remain duty-free and protected by the USMCA.

Canada currently faces a base U.S. tariff of 35%, although most of its goods also remain duty free because of the USMCA.