The Trump administration declined to renew the US-Mexico-Canada Agreement on 2 July, triggering a 10-year countdown to the trade deal's potential expiration unless Washington and its neighbours agree to major restructuring by July 2036.
The Trump administration has declined to renew the US-Mexico-Canada Agreement (USMCA), putting the trade deal on a 10-year countdown toward possible termination. The announcement came following the agreement’s mandatory six-year review and signals Washington’s intent to renegotiate key terms before the pact expires. The decision means the trilateral trade pact will not receive an automatic 16-year extension.
This follows President Donald Trump casting doubt on the future of the USMCA, saying the United States would be better off without the trade pact. Speaking in France on 17 June 2026, Trump remarked that he would “rather not have the agreement,” while adding that he is still prepared to sign a renewal if negotiations proceed.
“The United States did not agree to renew the USMCA in its current form,” US Trade Representative Jamieson Greer stated. The US will maintain the agreement for another decade with annual reviews, but wants Mexico and Canada to accept stricter trade rules if they wish to avoid its collapse.
Industry pushback over costs and affordability
Automakers and agricultural groups are pushing back hard.
Nissan CEO Ivan Espinosa warned that stricter content rules could make vehicles unaffordable for American consumers, arguing the US supply chain cannot support such demands. Agricultural exporters, meanwhile, stressed that Mexico and Canada purchase over one-third of US farm exports, making USMCA continuation critical to rural livelihoods.
With approximately USD 1.6 trillion in trilateral trade at stake annually, the three nations face mounting pressure to find common ground—or risk fracturing one of the world’s largest regional trade blocs.
Reshoring manufacturing, reducing deficits
American trade deficits with both neighbours have ballooned, reaching USD 197 billion with Mexico and USD 48.3 billion with Canada in 2025.
Trump’s administration, seeking to reverse supply chain movements triggered by China tariffs, plans aggressive bilateral negotiations starting the week of 20 July in Mexico City.
Mexico’s Economy Minister Marcelo Ebrard acknowledged the divisions but expressed optimism about resolving differences through talks.
However, the sticking point remains the automotive content rules. The US is demanding that North American vehicles contain 50% American-made parts—pushing the regional content requirement to 82%.
Trump has already imposed 25% tariffs on Mexican and Canadian autos, 50% on metals, and 10% on lumber.
