The United States government announced on Wednesday, July 1, 2026, that it refuses to renew the trilateral trade agreement regulating $1.6 trillion in commerce with Mexico and Canada.
The decision came one day before the scheduled first joint mandatory review of the pact.
US Trade Representative Ambassador Jamieson Greer stated that the American government will not maintain the United States-Mexico-Canada Agreement (USMCA) without structural revisions.
“The United States will continue to engage with Mexico and Canada to address the Agreement’s shortcomings and our trade deficits with these countries.
However, the Agreement remains in force pending resolution of these issues or until the Agreement’s termination,” Greer said.
The current terms will remain operational while bilateral discussions proceed.
The US scheduled a third round of bilateral negotiations with Mexican officials during the week of July 20 to address issues regarding the joint review.
The refusal follows public criticisms by US President Donald Trump, who repeatedly questioned the necessity of the trilateral economic arrangement.
Trump previously established a sunset clause during his first term, which now triggers a mandatory six-year review period following the non-renewal.
Without an amendment, the agreement will expire on July 1, 2036.
“No real advantage to it; it’s irrelevant,” Trump said.
The administration’s stance reflects ongoing skepticism toward trilateral trade frameworks despite existing import taxes.
A Trump administration official told Reuters that the president remains doubtful about agreements with both neighbors, even after implementing 25 percent tariffs on automotive sectors, 50 percent tariffs on metals, and 10 percent tariffs on lumber.
“I don’t know that I’m going to renew it,” Trump said.
The American leader indicated that his administration is keeping communication channels open for potential adjustments.
“We’re talking to them. We’ll see if we do something,” Trump said.
The trade pact originally replaced the North American Free Trade Agreement (NAFTA) on July 1, 2020.
According to the US Department of State, the USMCA was intended to foster equitable economic growth and protect high-paying American jobs.
The State Department documented that the agreement updated regional trade rules by incorporating dedicated chapters for digital commerce, anti-corruption policies, regulatory standards, and small-to-medium enterprises.
However, Greer noted that rising trade imbalances necessitated the decision.
In 2025, the US goods trade deficit escalated to $197 billion with Mexico and $48.3 billion with Canada, fueled by Canadian crude oil imports and supply chains shifting from China to Mexico to evade US tariffs.
“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,” Trump said.
In response, Mexican Economy Minister Marcelo Ebrard confirmed during a Wednesday news conference that Mexico intends to collaborate on resolving American concerns regarding trade imbalances and manufacturing employment.
Ebrard participated in a virtual conference alongside Greer and Canadian Minister Dominic LeBlanc.
“There is no difference that I can identify between Mexico, the United States and Canada that is so big that we cannot resolve it,” Ebrard said.
The Mexican minister emphasized that defending domestic automotive manufacturing remains a top priority throughout the ongoing diplomatic dialogues.
“We wouldn’t allow our [car-making] industry to be at a disadvantage,” Ebrard said.
Ebrard stated that automotive safeguards have formed the core of recent trade deliberations with American representatives.
“I’d say that has been the main point of discussion with the United States in all these talks: protecting our automotive industry,” Ebrard said.
Canadian Minister Dominic LeBlanc, who oversees US-Canada trade relations, affirmed that Canada will press forward in addressing US tariffs levied on Canadian steel, aluminum, lumber, and automobiles.
“We agreed on the importance of continuing our discussions and identifying ways to ensure trade and investment frameworks between Canada, the United States and Mexico continue to support North American prosperity and competitiveness,” LeBlanc said.
