Trump Administration Refuses to Extend USMCA Trade Deal, Starts 10-Year Countdown to Termination

On Wednesday, July 1, the office of U.S. Trade Representative Jamieson Greer announced that the United States would not agree to extend the USMCA in its current form, effectively starting a 10-year period after which the agreement will expire. The decision came after a six-year review of the North American free trade zone.

The agreement will remain in force for 10 years but will be subject to annual reviews and will lapse unless all three parties agree to extend it with changes. The U.S. seeks amendments to bring manufacturing jobs back to America and reduce the trade deficit with its neighbors.

Greer stated that the U.S. will continue to engage with Mexico and Canada to address the agreement's deficiencies and reduce the trade deficit. He also announced a planned bilateral round of talks with Mexico, starting the week of July 20. The talks in Mexico City will focus on strengthening North American rules of origin for automobiles and other industrial goods, as well as economic security to prevent third countries, including China, from benefiting from market access under USMCA.

Mexican Economy Minister Marcelo Ebrard said at a press conference that Mexico seeks to help resolve U.S. concerns over job losses and trade deficits, but acknowledged differences over Washington's demands to tighten regional rules of origin for automobiles. He held online talks with Greer and Canadian Minister Dominic Leblanc, who oversees trade relations with the U.S.

Leblanc stated that Canada will continue to work on resolving U.S. tariffs on Canadian steel, aluminum, automobiles, and lumber. He emphasized that the parties agreed on the importance of continuing negotiations and finding ways to ensure that trade and investment mechanisms between Canada, the U.S., and Mexico continue to support North America's prosperity and competitiveness.