Tariffs will remain central to any revised USMCA deal, U.S. Trade Representative Jamieson Greer confirmed this week, signalling the administration's intention to use import duties as leverage to reshape North American supply chains and narrow trade deficits with Mexico and Canada. 

RF Report

The Trump administration is pressing ahead with its tariff-first approach to trade with North American neighbours, according to US Trade Representative (USTR) Jamieson Greer.

Speaking at the Council on Foreign Relations on Tuesday, 26 May 2026, Greer confirmed that levies on both Mexico and Canada will remain in place as the administration begins renegotiating the six-year-old USMCA agreement.

Deficit concerns drive negotiation strategy

The administration’s focus centres on the widening trade imbalance with Mexico, where the US deficit climbed nearly 15% to USD 196.9 billion in the past year, even as overall American goods deficits fell by more than 30% to USD 202.1 billion. Greer indicated that auto and steel tariffs will continue under any revised framework, with tariff reductions contingent on Mexico raising its own duties on imports from outside the region.

“We’re going to have tariffs,” Greer stated plainly, signalling a departure from the original tariff-free structure of the pact.

Rules of origin and production shifts

US and Mexican negotiators are scheduled to meet in Mexico City this week to kick off formal negotiations, with particular attention to regional rules of origin—provisions that directly impact automotive and industrial manufacturers. The administration aims to reshape these rules to boost American-sourced content in finished goods, though Greer stopped short of detailing specific demands.

A strained US-Canada relationship

Canada presents a separate headache for Washington. Unlike the European Union and other trading partners who have accepted U.S. tariff rates, Canada has retaliated—a stance the administration views as fundamentally different from conventional trade friction. Greer suggested the gap between the two nations may be difficult to bridge, citing Canadian automotive production policies that rely on government mandates rather than market forces. The administration sees North American supply chain resilience as paramount to any revised arrangement.