The United States has decided not to renew the United States-Mexico-Canada Agreement (USMCA) in its current form after the three member countries completed the treaty’s mandatory six-year joint review.
The announcement came after a virtual meeting of the USMCA Free Trade Commission, where officials from the United States, Mexico, and Canada assessed the future of the regional trade pact.
Although the agreement was not extended for another 16-year term, it will remain fully operational while negotiations continue among the three governments.
Review Clause Triggers New Phase of Negotiations
The USMCA, which replaced the North American Free Trade Agreement (NAFTA) on July 1, 2020, includes a built-in review mechanism under Article 34.7. The provision requires all three countries to evaluate the agreement six years after it entered into force.
For the pact to receive an automatic 16-year extension, each country must formally confirm in writing that it wishes to continue the agreement. Because the United States declined to provide that approval, the treaty now enters a period of annual reviews rather than automatic renewal.
Unless the three nations later agree on an extension or a member withdraws, the agreement is scheduled to remain in force until July 1, 2036.
U.S. Cites Trade Imbalances and Agreement Concerns
Following the meeting, U.S. Trade Representative Jamieson Greer said Washington was unwilling to extend the agreement without first addressing what it considers significant weaknesses.
Greer stated that the United States would continue discussions with Canada and Mexico to resolve concerns related to the agreement, including trade deficits between the countries.
He emphasized that the decision not to renew the pact immediately does not affect its current legal status, meaning businesses can continue operating under existing USMCA provisions while negotiations proceed.
He also confirmed that the United States and Mexico are scheduled to hold another round of bilateral negotiations during the week of July 20.
White House Signals Desire for Updated Trade Terms
According to a senior administration official, President Donald Trump opted against approving an extension without first securing changes to the agreement. The official said the administration believes the existing trade framework should better address persistent U.S. trade deficits with both neighboring countries.
The official added that the administration considers recent policy actions to have already reshaped North America’s trading relationship and intends to pursue additional revisions before supporting a long-term extension.
Trade Deficits Remain Central to U.S. Position
Government trade figures for 2025 show the United States recorded a goods trade deficit of approximately $196.9 billion with Mexico and $46.4 billion with Canada.
Despite those imbalances, economic ties among the three countries remain substantial, with annual trade in goods and services approaching $2 trillion, underscoring the importance of maintaining uninterrupted commercial relations throughout the negotiation process.
Rules of Origin and Economic Security Remain Key Issues
U.S. negotiators are expected to continue pushing for revisions covering rules of origin, particularly those affecting automobiles and manufactured products.
Washington has also highlighted economic security as a priority, seeking stronger North American content requirements and measures designed to prevent non-member countries from benefiting indirectly from the agreement.
Officials have specifically raised concerns about supply chains involving goods connected to China and have argued that tighter provisions would strengthen regional manufacturing.
Businesses Retain Market Access Despite Uncertainty
For companies trading under the USMCA, Wednesday’s outcome means duty-free market access and existing trade rules remain unchanged for now. However, the absence of a long-term extension introduces additional uncertainty, as the agreement will now undergo annual reviews until the participating countries reach a new consensus.
This review process allows trade to continue uninterrupted while governments negotiate potential amendments over the coming years.
Further Talks Scheduled Later This Month
The next major milestone in the review process will come during the week of July 20, when U.S. and Mexican officials are set to meet in Mexico City for a third round of bilateral negotiations.
Those discussions are expected to build on earlier talks covering automotive rules of origin, steel and aluminum production, agriculture, and broader economic security matters.
Negotiations with Canada are continuing separately, with U.S. officials indicating they remain open to concluding updated trade protocols with each partner as quickly as possible.
