USMCA enters uncertain future after U.S. rejects automatic renewal

Despite the decision, the administration emphasized that USMCA remains in force while negotiations continue.

“The United States will continue to engage with Mexico and Canada to address the Agreement’s shortcomings and our trade deficits with these countries,” Greer said.

Bilateral negotiations between the U.S. and Mexico are scheduled to resume during the week of July 20.

Trade continues to hit record levels

The decision comes despite North American trade reaching historic highs.

U.S.-Mexico two-way trade totaled a record $872.83 billion in 2025, reinforcing Mexico’s position as the United States’ largest trading partner.

Meanwhile, total two-way trade between the United States and Canada reached $712.76 billion last year, making Canada the nation’s second-largest trading partner.

Combined, the two neighboring countries accounted for more than $1.58 trillion in annual U.S. trade, underscoring the economic importance of the USMCA region for manufacturers, retailers, automakers, agricultural producers and logistics providers.

For the trucking industry, the agreement governs hundreds of billions of dollars in cross-border freight moving annually through gateways such as Laredo, Texas, Detroit-Windsor, Buffalo-Niagara and Otay Mesa, California.

Annual review process begins

USMCA, which replaced the North American Free Trade Agreement (NAFTA) in 2020, contains a unique review mechanism designed to force member countries to periodically evaluate the agreement.

July 1 marked the deadline for the three governments to determine whether to extend the agreement for another 16 years. With the U.S. declining to do so, officials from all three countries must now meet annually to discuss possible revisions until an agreement is reached or the pact expires in 2036.

The Trump administration has argued that changes are needed to address U.S. trade deficits and other concerns with the agreement.

Agriculture and business groups urge renewal

Industries that rely heavily on integrated North American supply chains had previously urged the Trump administration to renew USMCA.

The National Corn Growers Association called USMCA “the single most important trade agreement to the corn industry,” noting that Mexico is the largest buyer of U.S. corn while Canada is the country’s largest export market for ethanol. The group urged negotiators to preserve the agreement while pursuing targeted improvements.

The Consumer Technology Association also warned against allowing the agreement to lapse, saying USMCA provides businesses with certainty to invest and innovate across an integrated North American market of nearly 500 million consumers. The organization argued that the agreement’s digital trade provisions help the U.S., Mexico and Canada compete against China in emerging technologies.