Trump administration declines to extend USMCA trade pact

The Trump administration formally declined to extend the United States-Mexico-Canada Agreement on Wednesday, the trade pact's six-year anniversary, setting in motion a decade-long countdown that could see the North American free trade zone expire on July 1, 2036.

U.S. Trade Representative Jamieson Greer met virtually with his Canadian and Mexican counterparts for the mandatory six-year review, where the United States announced it would not agree to a 16-year renewal of the agreement. The decision keeps the USMCA fully in force but triggers a process of annual joint reviews over the next 10 years, during which the three countries can continue negotiating revisions or agree to extend the pact at any time before its expiration.reuters+2

Canada and Mexico Pushed for Renewal

Both Canada and Mexico had publicly urged extension. Canadian Trade Minister Dominic LeBlanc formally proposed a 16-year renewal in early June, calling the agreement of "significant advantages" for all three nations. Mexican Economy Minister Marcelo Ebrard said it was "Mexico's intention" that the treaty be extended, while President Claudia Sheinbaum confirmed she had signed Mexico's position supporting the longer term.reuters+2

The United States, however, has been pressing for changes it considers necessary before any extension. Among the key U.S. demands: raising North American automotive content requirements so that vehicles would need 50% U.S.-specific content, pushing the overall regional content threshold to roughly 82% to qualify for duty-free treatment. Washington has also sought measures to prevent Chinese goods and investment from benefiting from the trade zone, with Greer identifying China-related issues as central to the review.ielp.worldtradelaw+2

What Comes Next

The USMCA, which replaced NAFTA when it took effect on July 1, 2020, remains fully operational despite the non-extension. No tariff schedules or trade rules change immediately. However, the annual review process introduces a layer of uncertainty for businesses planning long-term investments across the three-country trade bloc.aljazeera+3

Formal bilateral negotiations between the U.S. and Mexico are set to continue later in July with a third round in Mexico City. Canada, which was excluded from earlier bilateral rounds amid disputes over dairy access and provincial bans on American alcohol, faces a more uncertain path back to the table. Unless all three countries reach agreement during the rolling annual reviews, the USMCA will expire in 2036, ending more than four decades of preferential North American trade arrangements that began with the original Canada-U.S. free trade agreement in 1989.iowapbs+2