WASHINGTON — President Donald Trump and his Mexican counterpart Claudia Sheinbaum plan to speak by phone on Thursday morning, according to people familiar with the plans, as a Friday deadline to avoid a 30% tariff nears with no agreement between the U.S. and its largest trade partner.

Talks between the governments, which saw Mexican Economy Minister Marcelo Ebrard and his negotiating team visit Washington multiple times to meet with Trump’s cabinet members, have reached the point where decisions must be taken at the leaders’ level, according to the people, who asked not to be identified without permission to speak publicly. Mexico made sincere and potentially persuasive proposals about how to rebalance trade between the nations, they said.

While officials from both nations have maintained ongoing communication, and Mexican officials have expressed optimism about a possible deal, Trump makes the final decisions, and it’s unclear how he views the Mexican proposals, the people said. Mexico has been on the other side of the largest U.S. bilateral trade deficit in recent years after China.

Mexico’s peso extended gains on Bloomberg’s report about the planned call, reaching 18.84 per dollar. Spokespeople for the White House and the Mexican presidency didn’t immediately respond to requests for comment.

Sheinbaum met Wednesday with two U.S. congressmen, Democrat Ro Khanna of California and Republican Don Bacon of Nebraska, and the U.S. ambassador to Mexico, Ron Johnson.

Trump earlier this year imposed a 25% tariff on Mexico and Canada, accusing them of insufficient efforts to stop fentanyl trafficking. But the impact has been limited because he exempted goods that qualify for duty-free treatment under the U.S.-Mexico-Canada agreement, or USMCA, negotiated during his first term.

Trump in a public letter on July 12 made a 30% tariff threat to Sheinbaum, citing an alleged lack of progress in challenging the country’s drug cartels. He also this month threatened 35% tariffs on Canada’s exports, citing a slew of irritants, including non-tariff trade barriers.

With the USMCA exception, nearly 83% of U.S. imports from Mexico were exempt from tariffs in May, according to a Bloomberg Economics analysis of data from the Commerce Department’s Census Bureau. That still leaves about $80 billion in Mexico goods that were subject to higher tariff levels. Overall, the effective average U.S. tariff on Mexico has increased to about 6.6%, up from just 0.2% before Trump began his second term.

It remains unclear if that exemption would be continued in full or narrowed if Mexico and Canada fail to reach agreement with the U.S. by Trump’s self-imposed Aug. 1 deadline, the people said.

Canadian Prime Minister Mark Carney said Wednesday the nation’s own talks with the U.S. may not finish by Trump’s Friday deadline. Trump and his cabinet have negotiated a slew of tariff agreements with partners ranging from the European Union to Vietnam to Japan.

Carney’s office declined to comment on whether a call with Trump was being arranged. Senior Canadian officials are currently in Washington for trade talks.

_____

(With assistance from Josh Wingrove and Brian Platt.)

_____

©2025 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.