U.S. Rejects USMCA Renewal, Triggers 10-Year Exit Countdown

The United States officially announced on July 1 that it would not renew the United States-Mexico-Canada Agreement (USMCA) under its current terms, triggering a ten-year countdown to the agreement’s termination. Under the accord’s provisions, the existing agreement will remain in force for ten years unless the three countries reach a new deal revising its terms. During this period, an annual review will be conducted each year, after which the agreement will automatically expire. U.S. Trade Representative Jamieson Greer stated that the U.S. refusal to renew under the original terms aims to bring manufacturing jobs back to the United States and reduce trade deficits with Mexico and Canada. Data show that in 2025, the U.S. goods trade deficit with Mexico reached $197 billion and with Canada stood at $48.3 billion—both deficits continuing to widen and serving as the core motivation behind Washington’s push for revisions. The U.S. plans to hold bilateral negotiations with Mexico during the week of July 20, focusing primarily on tightening North American rules of origin for automobiles and other industrial goods and strengthening regional economic security to prevent third countries from benefiting through preferential provisions of the agreement. Mexican Economy Minister Marcelo Ebrard said Mexico is willing to address U.S. concerns but noted ongoing disagreements on key issues such as automotive rules of origin. He emphasized that Mexico will not accept terms that undermine the competitiveness of its auto industry. On the same day, Ebrard held a trilateral virtual meeting with Greer and Canadian Minister of International Trade and Intergovernmental Affairs Dominic LeBlanc. LeBlanc stated that Canada will continue urging the U.S. to remove tariffs imposed on Canadian steel, aluminum, automobiles, and lumber products, underscoring that all three parties agree on the importance of sustained consultations to preserve the North American trade and investment framework that supports regional economic prosperity and industrial competitiveness. The USMCA was negotiated under the Trump administration, replacing the North American Free Trade Agreement (NAFTA), which had been in effect since 1994. The agreement underpins a deeply integrated regional economy among the three countries, with annual trade totaling approximately $1.6 trillion. This decision follows a joint six-year review conducted by the three nations upon the expiration of the initial six-year term of the agreement.