U.S. Withholds Long-Term Commitment to USMCA

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Jul. 1, 2026
By: Lawrence M. Friedman

USMCA has a unique review and extension process that is playing out right now. Six years after the Agreement came into force, the parties are to conduct a “joint review, make recommendations, and decide on appropriate actions. In the joint review, the parties are to meet and confirm whether they wish to continue in the Agreement for another 16-year term. If a party does not confirm its interest in extending the Agreement for another 16 years, the parties must have a joint review every year for the remainder of the initial 16-year term.

That six-year review is now underway, and the parties have begun discussions. Today, U.S. Trade Representative Jamieson Greer issued a statement saying, in part:

In accordance with the Agreement, the United States, Mexico, and Canada met virtually today to discuss the operation of the USMCA. The United States did not agree to renew the USMCA in its current form. As a result, the USMCA is not renewed. The United States will continue to engage with Mexico and Canada to address the Agreement’s shortcomings and our trade deficits with these countries. However, the Agreement remains in force pending resolution of these issues or until the Agreement’s termination. As previously announced, the United States will meet with Mexico the week of July 20 for a third round of bilateral negotiations related to the USMCA joint review.

The immediate effect is not termination. The agreement remains in force. But without an agreement to extend it, USMCA could expire at the end of its initial 16-year term, and the parties would be required to revisit the issue annually in the meantime.

Press reports suggest that continuing U.S. trade deficits with Canada and Mexico are a major source of the Administration’s frustration with USMCA. Apparently, the expectation was that changes to the NAFTA rules of origin implemented in USMCA would reduce trade deficits. Other concerns include Canadian dairy protections, Mexican energy policy, and U.S. exports of genetically modified corn.

Negotiations among the countries are ongoing. Greer is reportedly suggesting that rules of origin similar to those in place in auto sector be expanded to other industries including electronics, chemicals, and aerospace. Uncertainty of that kind can affect sourcing decisions, capital investment, supplier contracts, and long-term planning for companies that depend on North American production networks.

Canadian and Mexican officials have reaffirmed their commitment to the pact. U.S. officials hope for a quick end to negotiations. 

If you have questions about this or any trade-related legal concern, please contact an attorney ar Barnes, Richardson & Colburn, LLP.