US declines to extend US-Mexico-Canada Agreement

WASHINGTON — The Trump administration on Wednesday declined to extend the United States–Mexico–Canada Agreement (USMCA), triggering a 10-year timeline that will ultimately wind down the trade pact unless the three countries agree on revisions or a formal renewal.

The decision follows a six-year review of the North American trade framework and effectively keeps the agreement in force for another decade, with annual reviews scheduled during that period. Officials said the arrangement leaves room for continued negotiations aimed at reshaping key provisions of the deal, particularly those related to manufacturing, supply chains and trade imbalances.

“The United States did not agree to renew the USMCA in its current form,” U.S. Trade Representative Jamieson Greer said in a statement. “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.”

Greer said the United States will move forward with a bilateral negotiating round with Mexico scheduled for the week of July 20. A senior administration official said the talks in Mexico City are expected to focus on strengthening rules of origin for automobiles and industrial goods, as well as broader economic security concerns aimed at limiting benefits to non-member countries, including China.

Mexican Economy Minister Marcelo Ebrard said Mexico is prepared to address U.S. concerns over trade imbalances and manufacturing shifts, though both sides remain divided over Washington’s push for stricter regional content requirements in the automotive sector.

“There is no difference that I can identify between Mexico, the United States and Canada that is so big that we cannot resolve it,” Ebrard said after participating in a virtual meeting with U.S. and Canadian officials. “We wouldn’t allow our auto industry to be at a disadvantage. That has been the main point of discussion in all these talks: protecting our automotive industry.”

Canadian officials also signaled willingness to continue discussions. Canada’s minister responsible for U.S. trade, Dominic LeBlanc, said Ottawa will continue working with Washington and Mexico City to address ongoing disputes, including U.S. tariffs on steel, aluminum, autos and lumber.

“We agreed on the importance of continuing our discussions and identifying ways to ensure trade and investment frameworks between Canada, the United States and Mexico continue to support North American prosperity and competitiveness,” LeBlanc said.

The USMCA, which replaced the North American Free Trade Agreement (NAFTA), was originally negotiated during President Donald Trump’s first administration and supports a highly integrated regional economy worth an estimated $1.6 trillion in annual trade.

Officials said the decision not to extend the agreement was widely expected, citing unresolved issues including persistent U.S. trade deficits with Mexico and Canada, which reached $197 billion and $48.3 billion respectively in 2025.

Much of the deficit with Canada is linked to energy imports, while the imbalance with Mexico has expanded as supply chains continue to shift in response to global trade tensions and tariffs on Chinese goods.

A senior administration official said the United States remains open to negotiating separate trade protocols with both Mexico and Canada, though no timeline was provided. The official also indicated that President Donald Trump is likely to remain skeptical of any revised agreement, despite earlier efforts to modernize North American trade rules.

Industry groups have urged the three countries to preserve the agreement in its current trilateral, duty-free form, warning that stricter rules could raise costs and disrupt supply chains. Automakers in particular have expressed concern about potential increases in production costs and consumer prices.

Ivan Espinosa, chief executive of Nissan, said changes to content rules could worsen affordability challenges for consumers and create additional strain on already complex supply chains.

“You cannot build all the parts in the United States. The supply chain is not set up to do that,” Espinosa said. “We need something that is actually executable.”

Farm organizations have also called for the continuation of USMCA, noting that Mexico and Canada together account for more than one-third of U.S. agricultural exports.

“USMCA is without a doubt critical to the livelihood of farmers, fishers and rural communities across the country who rely on exports to Mexico and Canada, and to obtain key inputs used in U.S. farming operations,” said Bryan Goodman, a spokesperson for the Agricultural Coalition for USMCA.

He added that stakeholders are encouraged by ongoing discussions and urged the three countries to continue working toward a strengthened agreement that supports long-term agricultural trade stability. -Reporting by David Lawder; Additional reporting by Kalea Hall in Detroit, Promit Mukherjee in Ottawa and Adriana Barrera and Ana Isabel Martinez in Mexico City; Editing by Andrea Ricci and Stephen Coates/Reuters