The Trump administration has declined to renew the USMCA in its current form, opening a fresh round of negotiations over the trade pact while leaving it in force for now.
What Happened This Week
The announcement followed the first joint review required under the agreement's sunset provision, which forces the United States, Mexico and Canada to evaluate the deal six years after it took effect. The U.S. Trade Representative's office said in a Wednesday release that Washington would not agree to extend the pact as written. That decision triggers a new cycle of annual reviews that will continue until the three countries resolve their disputes or the agreement expires in 2036.
"The United States did not agree to renew the USMCA in its current form. As a result, the USMCA is not renewed," the Trade Representative's office said. USTR Jamieson Greer added that Washington intends to keep working with both neighbors to fix what he called the agreement's shortcomings and to chip away at persistent trade deficits with each country. Bilateral talks between American and Mexican negotiators are set to pick back up during the week of July 20.
Record Trade Volumes Complicate the Picture
The pushback on renewal arrives even as commerce across North America keeps climbing. Two way trade between the United States and Mexico hit a record $872.83 billion in 2025, cementing Mexico's place as America's top trading partner. Canada was not far behind, with $712.76 billion in two way trade last year, enough to hold its spot as the second largest partner. Together, the two countries accounted for more than $1.58 trillion in annual American trade.
That volume touches nearly every corner of the economy, from automakers and agricultural exporters to retailers and logistics firms. Freight crossing gateways such as Laredo, Detroit-Windsor, Buffalo-Niagara and Otay Mesa depends heavily on the rules USMCA sets, meaning any prolonged uncertainty could ripple through trucking and supply chain planning on both sides of the border.
How the Review Mechanism Plays Out
USMCA replaced NAFTA in 2020 and was built with a built in checkpoint: a mandatory review after six years to decide whether to extend the deal for another 16 years. July 1 was the deadline for that call. Because the U.S. chose not to extend it outright, officials from all three governments are now obligated to meet every year to hash out possible changes, a process that continues until they strike a new deal or the agreement runs out in 2036.
For now, the existing terms of USMCA stay in effect, so tariffs, quotas and cross border rules for manufacturers and shippers remain unchanged. What is less clear is how quickly, or how far, the three countries can move toward addressing the deficit concerns Greer raised without disrupting trade flows that have only grown since the pact took effect.