President Donald Trump has decided not to extend the U.S.-Mexico-Canada Agreement (USMCA) and will instead seek independent trade agreements with Canada and Mexico, according to a Trump administration official cited by FOX Business [1]. The decision was made at the six-year review deadline, with the U.S. declining to renew the USMCA in its current form during a virtual meeting with Canada and Mexico, as confirmed by U.S. Trade Representative Jamieson Greer [1].
The USMCA, which replaced NAFTA, was signed in December 2019 and took effect on July 1, 2020. It is scheduled to remain in force until 2036, but the U.S. will now pursue separate deals with Canada and Mexico that could last up to 10 years [1]. Greer stated that the U.S. will continue to engage with both countries to address what the administration sees as shortcomings in the agreement and to tackle U.S. trade deficits with Canada and Mexico [1].
Despite the decision not to renew, the USMCA remains in effect pending resolution of these issues or until the agreement is terminated [1]. The U.S. is set to meet with Mexico during the week of July 20 for a third round of bilateral negotiations related to the USMCA joint review [1].
Canada and Mexico are among the largest trading partners of the United States. Data from the U.S. International Trade Commission (ITC) indicates that in 2024, Canada and Mexico were the two largest export markets for U.S.-made goods, with Mexico being the largest source of U.S. imports and Canada ranking third [1]. The Trump administration previously imposed 25% tariffs on Canada and Mexico last year, which led to negotiations over tariffs and trade terms, increasing uncertainty about the future of the agreement [1].
CONCLUSION
The U.S. decision not to renew the USMCA introduces significant uncertainty for North American trade, as the administration pursues separate deals with Canada and Mexico. While the USMCA remains in force for now, ongoing negotiations and past tariff actions highlight the potential for further market volatility.