The US has chosen not to renew the US-Mexico-Canada Agreement (USMCA), opting instead for annual reviews of the trade pact.
Under the arrangement, USMCA will stay in effect for as long as ten years unless one of the three countries withdraws.
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It could then be extended through successive yearly reviews. If no agreement is reached during that period, the pact will end in 2036.
The decision was announced on 1 July 2026, the sixth anniversary of the agreement’s start, when the US, Canada and Mexico had the option of prolonging it by 16 years.
“We think there are substantial issues,” US Trade Representative Jamieson Greer said in an interview with Bloomberg, adding that the administration is “not prepared to rubber stamp the agreement.”
Trade within the three countries exceeded $1.6tn in 2024, compared with $1tn when the USMCA came into force in 2020.
The US, Canada and Mexico together account for nearly a third of global GDP.
About 90% of imports from Canada and Mexico are now listed as compliant with the USMCA.
Use of the programme rose last year as new tariffs increased incentives for companies to submit the necessary paperwork.
The move marks a change in position for President Donald Trump, who signed the original USMCA into law in 2020.
According to the administration, unresolved trade deficits with Mexico and Canada, along with provisions in the agreement that restrict tariffs President Trump has sought to impose, are among the reasons for reopening the pact.
US and Mexican officials are due to hold a third round of talks in the week of 20 July.
Those discussions are set to cover rules of origin for industrial goods beyond the automotive sector and may also include aerospace, intellectual property and water quality, according to a senior administration official.
Dominic LeBlanc, the Canadian minister responsible for US trade, said: “We agreed on the importance of continuing our discussions and identifying ways to ensure trade and investment frameworks between Canada, the US and Mexico continue to support North American prosperity and competitiveness. For Canada, this includes substantive discussions with the US on addressing sectoral tariffs on Canadian steel, aluminum, autos and lumber.”
According to Bloomberg’s report, the US has conducted formal discussions with Mexico in recent months, while Canada has largely been left out of the negotiations.
During Trump’s presidency, the administration has been at odds with Canadian Prime Minister Mark Carney, who has sought to lessen Canada’s trade reliance on the US.
Separate US duties on goods including autos and metals remain unresolved and are expected to be part of future talks.
