US Declines to Renew USMCA, Initiating 10-Year Expiration Process

Key facts

• The Trump administration has refused to renew the U.S.-Mexico-Canada Agreement (USMCA).
• This decision initiates a 10-year process toward the trade deal's potential expiration.
• The USMCA mandates a joint review six years after its entry into force.
• The U.S. trade representative confirmed Washington will conduct annual reviews instead of a full renewal.
• The move introduces uncertainty for businesses operating under the trade agreement.

The Trump administration has declined to renew the U.S.-Mexico-Canada Agreement (USMCA), a trade pact Donald Trump once championed. This decision begins a 10-year process that could lead to the agreement's expiration, creating uncertainty for businesses reliant on the deal.

The USMCA, which replaced NAFTA and governs approximately $2 trillion annually in goods and services between the three North American countries, was due for a joint review six years after its July 1, 2020, entry into force. However, following virtual talks, the U.S. trade representative's office confirmed Washington's refusal to renew the pact on its existing terms, citing persistent trade deficits.

Instead of a full renewal, the U.S. plans to conduct annual reviews. A senior administration official stated that President Trump "chose not to rubber stamp a USMCA renewal without addressing existing issues." Mexico's economy minister, Marcelo Ebrard, indicated his government is open to addressing U.S. concerns regarding foreign dependence, expressing optimism that disagreements can be resolved.

Trump had previously criticized the USMCA, even threatening to abandon it, despite having struck the deal himself in 2020. The shift to annual reviews raises concerns about potential disruptions for businesses and limitations on cross-border investments.