The North American trade agreement will remain in effect for now, but Washington’s refusal to extend it in its current form adds uncertainty for businesses across the United States, Canada and Mexico.
By yourNEWS Media Newsroom
The United States declined Wednesday to renew the U.S.-Mexico-Canada Agreement in its current form, pushing the North American trade pact into a new period of annual reviews and extended negotiations over tariffs, market access and manufacturing rules.
U.S. Trade Representative Jamieson Greer said Washington would not agree to a 16-year extension of the deal as written. The decision means USMCA remains in force, but without the long-term certainty sought by Canada, Mexico and many businesses that rely on integrated North American supply chains.
“The United States did not agree to renew the USMCA in its current form. As a result, the USMCA is not renewed,” Greer said in a statement.
“The United States will continue to engage with Mexico and Canada to address the agreement’s shortcomings and our trade deficits with these countries,” he added.
The trade pact, implemented in 2020 to replace the North American Free Trade Agreement, governs nearly $1.9 trillion in annual goods and services trade among the three countries. Canada and Mexico have surpassed China as the United States’ two largest trading partners.
Although Wednesday marked the first six-year review deadline under USMCA, the agreement does not immediately expire. It remains in effect for another 10 years unless one of the three countries withdraws entirely after giving six months’ notice.
Without a renewal, however, the pact now becomes subject to rolling annual reviews, a structure likely to keep businesses facing uncertainty over the rules governing North American trade.
A senior U.S. official told reporters that trade deficits remain a major concern for Washington, along with what the administration views as insufficient market access in Canada and Mexico. The official pointed to disputes involving sectors such as dairy and corn.
Mexico Economy Secretary Marcelo Ebrard confirmed that the countries had not reached agreement on renewal.
Greer held a virtual meeting Wednesday with Ebrard and Dominic LeBlanc, Canada’s minister responsible for Canada-U.S. trade.
The outcome had been widely expected after President Donald Trump said in June that he was not “looking to renew” the agreement, despite having negotiated and praised USMCA during his first term.
“We don’t need anything that they have,” Trump said at the time.
Canada and Mexico had both supported renewing USMCA for another 16 years.
The decision leaves negotiators to continue talks that could last months or years. Discussions are expected to cover tariffs, rules of origin, Chinese supply chain concerns, auto manufacturing and sector-specific trade rules.
The senior U.S. official said the countries should not wait until the final years before the agreement’s scheduled 2036 expiration to settle outstanding disputes.
“I think we need to come to a conclusion quickly, if possible,” the official said.
Analysts said the decision does not immediately change the flow of goods and services across North America. But it could affect business planning, especially in industries that depend on long-term capital commitments.
Scott Lincicome of the Cato Institute told AFP that the uncertainty could weigh on investment decisions. Still, he said he expects USMCA to survive because of the scale and importance of North American trade.
The auto industry remains one of the most sensitive areas in the talks.
USMCA currently requires vehicles to contain 75% North American content to qualify for duty-free treatment, up from 62.5% under NAFTA. The United States wants to raise that threshold and is also seeking a new rule requiring 50% of vehicle content to be made in the United States.
Canada and Mexico have resisted that approach, arguing it would undermine the regional integration that defines the agreement.
Automakers have spent years restructuring supply chains to meet the current 75% standard. A higher threshold, combined with a U.S.-specific production requirement, could increase costs for vehicles assembled in Mexico and Canada and potentially raise prices for American consumers.
“North American economic integration enables enormous competitive benefits for the region,” said Matt Blunt, president of the American Automotive Policy Council.
Labor groups, meanwhile, said USMCA should not simply be extended without changes.
Brian Bryant of the International Association of Machinists and Aerospace Workers said the agreement “should not simply be extended as-is.”
He called for stronger labor standards and “meaningful measures that discourage corporations from moving jobs out of the United States and Canada in pursuit of cheaper labor.”
The Trump administration has also focused on preventing Chinese goods from entering the United States through Mexico or Canada under favorable tariff treatment. USMCA’s stricter content rules were designed in part to address that concern, but Washington is seeking further changes.
The United States and Mexico have already held two rounds of bilateral trade talks. A third round is expected during the week of July 20.
Mexico is seeking relief from U.S. tariffs on steel, aluminum and autos after Trump imposed sharp duties on steel, aluminum and copper imports. Greer has met with LeBlanc, though no formal schedule for U.S.-Canada talks was announced Wednesday.
Despite Trump’s broad tariff actions against trading partners during his second term, the administration has continued to exempt many USMCA-eligible products from those duties, underscoring the agreement’s practical importance.
For companies that trade across the continent, the lack of a long-term renewal means the next phase of USMCA will be defined by negotiation rather than certainty. The agreement remains in place, but the rules that govern North American commerce are now open to continued revision as the United States presses for changes to deficits, market access, supply chains and manufacturing.
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