Trade Representative Jamieson Greer said the U.S. is "not prepared to rubber stamp the agreement," opening a 10-year review window before the pact expires
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The U.S. decided against renewing the United States-Mexico-Canada Agreement on Wednesday, U.S. Trade Representative Jamieson Greer said, choosing annual reviews of the pact instead of a 16-year extension that the three countries could have agreed to by today's deadline.
Short of a formal exit, USMCA stays on the books under a sunset clause that triggers annual review sessions — a rolling process that could stretch a decade. Should those reviews fail to produce a revised agreement, the pact would lapse on July 1, 2036, according to Reuters.
"We think there are substantial issues," Greer told Bloomberg, adding that several changes are needed to address imbalances. The Trump administration had previously signaled it would not extend the pact, with Greer saying in May that the U.S. wants to strengthen North American rules of origin "in a way that enhances U.S. content in these goods."
The shift to annual reviews raises the prospect of extended uncertainty for businesses operating across North American supply chains. Annual trade in goods and services among the three countries totals roughly $2 trillion, a figure that underscores how much is at stake, according to CNBC. Intraregional trade surpassed $1.6 trillion in 2024, up from $1 trillion when the agreement took effect in 2020.
"We have these ongoing negotiations and we don't know exactly when they will end, and there's no short- or medium-term forcing function for those negotiations to end," Patrick Childress, co-lead for Holland & Knight's USMCA team, told Bloomberg.
Automakers face some of the sharpest exposure to the prolonged uncertainty; vehicles and parts accounted for roughly 18% of U.S. commerce with its two neighbors in 2025. On the question of automotive content, Washington is pushing for a rule that half the value of every North American-assembled vehicle originate in the United States — a threshold that would lift the overall regional content requirement to 82%, citing people familiar with the talks. Under the existing agreement, passenger vehicles and light trucks must meet a 75% regional value content threshold to qualify for preferential treatment.
The U.S. is holding formal negotiations with Mexico but has not scheduled talks with Canada. Prime Minister Mark Carney struck a measured tone, saying Wednesday's meeting would not yield anything to sign while still pressing for meaningful progress. "The priority is to get a new deal," he said. Mexico's economy minister, Marcelo Ebrard, said he does not expect the agreement to be scrapped.
According to Diego Marroquín Bitar, a fellow at the Center for Strategic and International Studies, the scope of what Washington has put on the table goes well past commerce — immigration, crime, and other non-trade concerns have all featured in public administration statements, a breadth he said could drag out the process. "Everything is on the table. Not just the trade issues," Marroquín Bitar told CNBC. "The more things on the table, the longer it takes to negotiate and the more uncertainty it will generate."
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