United States says it will not renew USMCA

The United States has told Mexico and Canada it will not renew the USMCA trade pact “in its current form,” extending a cloud of annual reviews over the agreement that underpins much of North American manufacturing. El País reports the announcement was made on July 1, after a virtual meeting between US trade representative Jamieson Greer and his counterparts Marcelo Ebrard and Dominic LeBlanc.

The USMCA was designed to replace NAFTA with a built-in review mechanism, but Washington is now treating that mechanism less like a scheduled check-up and more like a standing threat. According to El País, the Office of the United States Trade Representative wants yearly reviews, while the White House is simultaneously telling companies to invest in the United States to avoid the uncertainty those reviews create. For firms that built supply chains around predictable tariff treatment, the message is that market access is no longer a baseline condition but something that can be renegotiated on a calendar.

Mexico’s government is publicly trying to narrow the damage. Ebrard said Mexico would proceed under an annual-review track for the next 10 years, the remaining term of the agreement, and argued that ongoing reviews could help resolve disputes before they harden into crises. President Claudia Sheinbaum, for her part, framed the pact as beneficial to the United States because it lowers consumer prices, and stressed the value of North America acting as a bloc against global competitors.

US officials are leaning on a different set of metrics. El País quotes a senior Commerce Department official saying trade relations “shifted” after Donald Trump imposed unilateral tariffs last year, and notes US claims that the trade deficit remains unresolved even as the deficit with Canada has fallen over the past year and a half. The practical effect is to turn the agreement into a lever for domestic industrial policy: if trade terms can be reopened each year, investment decisions can be pulled back across the border without Congress rewriting a treaty.

The next deadlines are already on the calendar. The United States is due to meet Mexico during the week of July 20 for a third round of bilateral negotiations tied to the joint review process, according to El País. Until then, the agreement remains in force—while the parties debate what, exactly, it will be worth a year from now.

The USMCA was sold as a long-term framework for integrated production. It is now being administered as a contract that comes up for renewal every year.