Key facts
- President Donald Trump's administration will not renew the USMCA trade pact in its current form.
- The USMCA will now undergo annual reviews, with any country able to withdraw with six months' notice.
- The decision could lead to the treaty expiring in 2036.
- The USTR cited rising US trade deficits with Mexico and Canadian countermeasures as reasons for the decision.
- The USTR will push to increase US content requirements, particularly in auto manufacturing.
- The USTR may seek separate agreements with Mexico and Canada instead of a three-way deal.
President Donald Trump's administration has decided not to renew the US-Mexico-Canada (USMCA) trade agreement in its current form, opting instead for annual reviews and potentially separate bilateral agreements. This decision, announced by Jamieson Greer, head of the USTR, sets the stage for protracted negotiations that could lead to the treaty's expiration in 2036. The USMCA, originally negotiated between 2018 and 2020, had a July 1, 2026 deadline for extension or revision. While the decision does not immediately terminate the pact, it means the three countries will hold annual reviews to seek consensus on a long-term extension, with any nation able to withdraw on six months' notice. Mexico's economy minister Marcelo Ebrard and Canada's trade minister Dominic LeBlanc have stated the agreement remains in force. Despite broad public support for renewing the deal without changes from sectors like energy and agriculture, Trump has expressed opposition, stating, "We do better without an agreement." The USTR cited rising trade deficits with Mexico and Canadian countermeasures during a past trade war as reasons for not automatically renewing the pact. Greer indicated the USTR will seek to strengthen US content requirements, particularly in auto manufacturing, while maintaining exemptions for North American trade in energy, fertilizers, and minerals from future tariffs. Executives warn that Trump's decision will negatively impact investment and business decisions, with one economist predicting worsening economic conditions monthly without a resolution. The USTR is scheduled to hold trade talks with Mexico on July 20, and Canada plans to focus discussions on tariffs for steel, aluminum, autos, and lumber.