USMCA renewal shelved: US opts for annual reviews instead, with talks on tariffs, trade deficits and Canada's role set to continue through July.
The United States has decided not to renew the US Mexico Canada Agreement outright, choosing instead a system of annual reviews that could keep the trade pact alive for up to ten years unless one of the three countries pulls out. The announcement came on July 1, 2026, the sixth anniversary of the agreement taking effect, a date that also gave Washington, Ottawa and Mexico City the option of extending the deal by 16 years.
At a Glance
- USMCA can now continue for up to ten years through yearly reviews rather than a single long term renewal.
- If no resolution is reached, the agreement is set to expire in 2036.
- Trilateral trade among the three nations topped 1.6 trillion dollars in 2024, up from 1 trillion dollars in 2020.
- About 90 percent of Canadian and Mexican imports currently qualify as USMCA compliant.
- US and Mexican officials plan a third round of talks the week of July 20.
Why Washington Is Reopening a Deal Trump Once Signed
US Trade Representative Jamieson Greer told Bloomberg the administration sees "substantial issues" with the pact and is "not prepared to rubber stamp the agreement." That marks a notable reversal, since President Donald Trump signed the original USMCA into law back in 2020. Administration officials point to persistent trade deficits with Mexico and Canada, along with clauses limiting tariffs the president has wanted to impose, as reasons to revisit the terms.
The three countries together represent nearly a third of global GDP, and trade volumes have grown substantially since the pact launched. Use of the USMCA compliance program picked up last year, largely because new tariffs gave companies stronger reason to file the paperwork needed to qualify for preferential treatment.
Canada Left Waiting While Mexico Talks Advance
Bloomberg's reporting indicates the US has held formal negotiations with Mexico in recent months while largely sidelining Canada. Talks scheduled for the week of July 20 are expected to address rules of origin for industrial goods outside the auto sector, potentially stretching into aerospace, intellectual property and water quality issues, according to a senior administration official.
Dominic LeBlanc, Canada's minister responsible for US trade relations, said discussions continue on how trade and investment frameworks can keep supporting what he called North American prosperity and competitiveness. He specifically flagged the need for substantive talks on sectoral tariffs affecting Canadian steel, aluminum, autos and lumber.
Tension between the Trump administration and Canadian Prime Minister Mark Carney has shaped much of this dynamic. Carney has pushed to reduce Canada's economic dependence on the US, a goal that puts him somewhat at odds with an administration focused on renegotiating terms it views as unfavorable.
Separate US tariffs on autos and metals remain unsettled and are expected to surface again in upcoming negotiations.
What Happens If the Reviews Stall
The annual review structure buys time but also injects yearly uncertainty into a trading relationship worth trillions. Whether Mexico and Canada can secure durable commitments on tariffs, or whether the pact simply drifts toward its 2036 expiration without resolution, will depend heavily on how the July talks unfold and whether Canada gets a seat back at the table.
