U.S. opts for annual reviews of USMCA instead of full renewal

Washington decided on Wednesday not to extend the United States-Mexico-Canada Agreement (USMCA) for another 16-year period, instead triggering annual reviews that could reshape the pact. The agreement will remain in force for the next decade unless a member withdraws, but the new review process allows the United States to address issues it says have not been resolved.

A senior administration official told reporters that President Donald Trump "chose not to rubber stamp a USMCA renewal without addressing existing issues," adding that the president’s primary concern is the trade deficits the United States runs with Canada and Mexico. The official noted that Trump’s tariffs have already altered the trading relationship among the three countries, effectively subordinating parts of the agreement.

U.S. Trade Representative Katherine Tai said the administration will continue to work with Mexico and Canada to fix what it calls “the Agreement's shortcomings.”

The USMCA, which replaced NAFTA in 2020, was previously praised by Trump as the “fairest, most balanced, and beneficial trade agreement” the United States had signed. However, his enthusiasm has waned amid broader trade tensions, and he has previously questioned the need for the pact, stating that the United States does not need what Canada or Mexico provide but expects better treatment in return.

Bilateral talks between the United States and Mexico are already underway and are set to continue beyond the July 1 deadline, while negotiations with Canada have not yet begun.