USMCA Renewal Shelved as US Opts for Annual Reviews

The USMCA trade pact is not getting the clean ten year renewal that Canada, Mexico and the United States once expected. Instead, Washington has opted for a system of annual reviews, a decision announced on July 1, 2026, exactly six years after the agreement took effect, and one that leaves companies moving goods across North America facing a longer stretch of uncertainty.

Under the original terms, the deal could have been extended by 16 years if all three countries agreed. That did not happen. Instead, USMCA will now run for up to ten years unless a country withdraws early, with the option of yearly extensions after that. If nobody signs off during that window, the pact simply expires in 2036.

Why Washington Balked at a Full Renewal

US Trade Representative Jamieson Greer told Bloomberg the administration sees "substantial issues" with the current agreement and is "not prepared to rubber stamp" it. That is a notable reversal, since President Donald Trump was the one who signed USMCA into law back in 2020. The administration now points to persistent trade deficits with Mexico and Canada, plus USMCA provisions that limit the tariffs Trump has wanted to impose, as reasons to reopen talks rather than simply extend the status quo.

How Much Trade Is Actually at Stake

The numbers explain why this matters beyond diplomatic posturing. Trade among the three countries topped $1.6 trillion in 2024, up from roughly $1 trillion when USMCA began in 2020. Together, the US, Canada and Mexico make up close to a third of global GDP. About 90 percent of imports from Canada and Mexico now qualify as USMCA compliant, and that compliance rate climbed last year as new tariffs gave companies more reason to file the necessary paperwork to claim preferential treatment.

Mexico appears to be getting more attention at the negotiating table than Canada right now. A third round of US Mexico talks is scheduled for the week of July 20, and a senior administration official said those sessions will address rules of origin for industrial goods well beyond autos, potentially touching aerospace, intellectual property and water quality.

Canada's Sidelined Position

Bloomberg's reporting indicates Canada has largely been left out of the formal discussions the US has held with Mexico in recent months. Dominic LeBlanc, the Canadian minister overseeing US trade relations, said both sides agreed on the importance of continuing talks aimed at keeping trade and investment frameworks supportive of what he called North American prosperity and competitiveness. For Canada, he added, that means pushing for substantive conversations on sectoral tariffs affecting steel, aluminum, autos and lumber.

The friction reflects a broader rift between Trump and Canadian Prime Minister Mark Carney, who has been working to reduce Canada's economic dependence on the United States. Separate US tariffs on autos and metals remain unresolved and are expected to surface again in upcoming negotiations.

What Happens If the Reviews Stall

The annual review structure buys time but doesn't resolve the underlying disagreements over tariffs and trade deficits. Whether Mexico's more active seat at the table translates into a broader deal, and whether Canada gets pulled back into direct talks, will likely shape how smoothly USMCA holds together before its 2036 deadline.