The Trump administration has declined to renew the United States-Mexico-Canada Agreement (USMCA) on its existing terms, opting instead to keep the pact alive through annual reviews rather than committing to another 16 years. Wednesday marked the deadline for the three countries to jointly decide the fate of the deal, which is set to expire in 2036.
After virtual talks among officials from all three governments, the Office of the United States Trade Representative confirmed that Washington had walked away from renewing the agreement, pointing to persistent US trade deficits with both neighbors. The refusal does not terminate the pact outright; the USMCA remains in force while negotiations continue, but it will now face a review every year instead of once every six years as originally designed.
Administration cites trade deficits as reason for refusal
A senior administration official, briefing reporters on a call announcing the decision, said President Donald Trump had “chose not to rubber stamp a USMCA renewal without addressing existing issues.” The official added: “So in other words, the United States did not agree to renew the USMCA in its current form. So, as a result, the USMCA is not renewed.”
In a statement, US Trade Representative Jamieson Greer said the US would “continue to engage with Mexico and Canada to address the Agreement’s shortcomings.”
Mexico and Canada seek resolution
At a press conference on Wednesday, Mexico’s economy minister, Marcelo Ebrard, expressed his government’s desire to address the issues raised by the US regarding foreign dependence. “There is no difference that I can identify between Mexico, the United States and Canada that is so big that we cannot resolve it,” he said, according to Reuters.
Trump has routinely criticized the USMCA in recent months and last month threatened to abandon it entirely. “We don’t need anything that Canada has. We don’t need anything that Mexico has, but they need everything that we have. And they have to treat us better,” he told reporters in the Oval Office.
Trump once championed the deal
Despite his current stance, Trump himself struck the USMCA in 2020 during his first term as an updated version of the 1992 North American Free Trade Agreement (NAFTA). At the time, he described the USMCA as the “fairest, most balanced, and beneficial trade agreement we have ever signed into law.”
The shift to annual reviews raises the prospect of damaging businesses that rely on the USMCA and could limit investments across North America. The deal currently governs approximately $2 trillion annually in goods and services among the three countries, according to CNBC.
