USMCA Renewal Shelved, US Opts for Annual Reviews

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 more years, or end it in 2036 if the three countries fail to reach terms.

The announcement came on July 1, 2026, exactly six years after USMCA took effect, the date on which Washington, Ottawa and Mexico City had the option to extend the deal by 16 years in one stroke. Instead, US Trade Representative Jamieson Greer told Bloomberg the administration sees "substantial issues" with the agreement and is "not prepared to rubber stamp" it. That stance marks a reversal for President Donald Trump, who signed the original USMCA into law in 2020.

Trade Volumes Have Ballooned Since 2020

Commerce among the three nations topped $1.6 trillion in 2024, up from roughly $1 trillion when the pact first came into force. Together the US, Canada and Mexico now generate close to a third of global GDP. About 90 percent of Canadian and Mexican imports are currently classified as USMCA compliant, and that share climbed last year as new tariffs pushed more companies to file the paperwork needed to claim preferential treatment under the deal.

Washington's rationale for reopening talks centers on what officials describe as persistent trade deficits with both neighbors, plus USMCA clauses that limit the tariffs Trump has wanted to impose. Those restrictions have become a sticking point as the administration weighs further duties on sectors like autos and metals, issues that remain unresolved separately from the renewal process.

Mexico Talks Move Ahead While Canada Waits

A third round of negotiations between US and Mexican officials is scheduled for the week of July 20. According to a senior administration official, those sessions will address rules of origin for industrial goods outside the auto sector, with aerospace, intellectual property and water quality also possibly on the table.

Canada, by contrast, has largely been sidelined from the formal discussions Washington has held with Mexico in recent months. Dominic LeBlanc, the Canadian minister overseeing US trade relations, said both sides