Donald Trump has declined to renew the United States-Mexico-Canada Agreement (USMCA), the North American trade pact he once hailed as a signature achievement. Instead of committing to another 16 years, the US has chosen to keep the deal alive through annual reviews, a move that introduces uncertainty for businesses across the continent.
Wednesday marked the deadline for the three nations to jointly decide the pact's fate, as stipulated in the original agreement. Following virtual talks between officials, the US trade representative's office confirmed that Washington would not renew the deal on its existing terms, citing persistent trade deficits with both neighbours. However, the refusal does not terminate the USMCA; it remains in force while negotiations continue, but will now face yearly reviews instead of the original six-year cycle.
A senior administration official stated that Trump “chose not to rubber stamp a USMCA renewal without addressing existing issues,” adding that “the United States did not agree to renew the USMCA in its current form.” US Trade Representative Jamieson Greer said the US would “continue to engage with Mexico and Canada to address the Agreement’s shortcomings.”
Mexico’s Economy Minister Marcelo Ebrard expressed confidence that differences could be resolved, saying “there is no difference that I can identify between Mexico, the United States and Canada that is so big that we cannot resolve it.” Trump has recently criticised the pact, threatening to abandon it entirely, despite having championed it as an update to NAFTA in 2020, calling it “the fairest, most balanced, and beneficial trade agreement we have ever signed into law.”
The shift to annual reviews raises concerns for businesses reliant on the USMCA, which governs approximately $2 trillion in annual goods and services among the three countries, potentially limiting cross-border investments.
