Under the terms of the deal, all three nations must formally agree to continue the agreement in order for it to receive a new 16-year extension. If even one country declines, the trade pact remains active but enters a period of annual reviews until either an extension is approved or the agreement reaches its expiration date in 2036.
That is exactly what happened this week.
Following a virtual meeting of the USMCA Free Trade Commission, U.S. Trade Representative Jamieson Greer announced that Washington was not prepared to sign off on a renewal without first addressing what the administration views as major unresolved problems.
“The United States did not agree to renew the USMCA in its current form. As a result, the USMCA is not renewed. The United States will continue to engage with Mexico and Canada to address the Agreement’s shortcomings and our trade deficits with these countries,” U.S. Trade Representative Jamieson Greer said following Wednesday’s meeting.
Greer emphasized that the administration is not withdrawing from the agreement and that trade rules remain in place while negotiations continue.
“However, the Agreement remains in force pending resolution of these issues or until the Agreement’s termination. As previously announced, the United States will meet with Mexico the week of July 20 for a third round of bilateral negotiations related to the USMCA joint review,” he added.
The decision reflects a broader trade strategy that has become a hallmark of Trump’s economic agenda. Rather than extending existing arrangements automatically, the administration is seeking leverage to renegotiate provisions it believes disadvantage American workers, manufacturers, and producers.
According to a senior administration official, President Trump was unwilling to approve a simple extension without first confronting issues that have contributed to significant trade imbalances.
The official explained that Trump “chose not to rubber stamp a USMCA renewal without addressing existing issues,” adding that concerns over persistent trade deficits remain at the center of ongoing discussions.
Recent trade figures provide some context for the administration’s position. Government data from 2025 showed the United States running a goods trade deficit of nearly $197 billion with Mexico and more than $46 billion with Canada.
Administration officials argue that while the USMCA improved upon NAFTA in several areas, additional reforms are needed to strengthen North American manufacturing and reduce dependence on foreign supply chains.
One of the key areas under review involves rules of origin, particularly in the automotive sector. U.S. negotiators have pushed for stronger requirements that would increase the amount of North American-made content required in vehicles and industrial products receiving preferential treatment under the agreement.
Another major concern centers on economic security and preventing countries outside the trade bloc from indirectly benefiting from the agreement. Officials have repeatedly pointed to concerns involving Chinese-linked goods and supply chains entering North American markets through loopholes that could undermine domestic industries.
Despite the administration’s decision, businesses operating throughout the United States, Canada, and Mexico will not see any immediate changes.
The USMCA remains fully operational, and companies can continue using its tariff-free trade provisions and cross-border trade rules. However, the agreement’s future structure is now likely to become a major subject of negotiations over the coming years.
The next round of talks is already scheduled. American and Mexican negotiators are expected to meet in Mexico City during the week of July 20 to continue discussions on automotive manufacturing standards, steel and aluminum production requirements, agricultural trade matters, and economic security concerns.
Canadian officials are also expected to remain engaged as negotiations continue.
A senior administration official suggested that the White House is exploring the possibility of reaching separate trade protocols with Canada and Mexico if doing so would accelerate progress and produce outcomes more favorable to American interests.
For now, the Trump administration appears determined to use the review process as an opportunity to secure stronger terms rather than simply extending the existing framework. While the agreement remains intact, Washington has made clear that future support for the USMCA will depend on whether negotiations can deliver changes that better align with the administration’s economic priorities.
With annual reviews now set to become the new reality, the future of North American trade could look very different by the time the next extension decision arrives.
