The Trump administration officially decided Wednesday not to renew the U.S.-Mexico-Canada trade agreement, starting a 10-year process to resolve conflicts among the countries or else discard the pact.
The American side refused to bless a new, 16-year term for the deal during a virtual meeting among the three North American trading partners.
“The United States did not agree to renew the USMCA in its current form. As a result, the USMCA is not renewed,” U.S. Trade Representative Jamieson Greer said. “The United States will continue to engage with Mexico and Canada to address the agreement’s shortcomings and our trade deficits with these countries.”
The agreement now enters a cycle of annual reviews for the next decade.
If the countries cannot agree on provisions and jointly renew the deal, the pact will expire at the end of the 10-year review period.
Rebalancing U.S. trade with other countries is a central plank of Mr. Trump’s economic agenda.
The president says too many countries are selling their products in America without buying U.S.-made goods, resulting in trade balances that undercut domestic industries.
Mr. Trump deployed tariffs in 2025 to gain leverage over other countries in trade talks and spur investments in American manufacturing.
The Supreme Court ruled his preferred tool for imposing levies was unlawful, forcing him to redo his tariff strategy this year.
Mr. Trump’s first administration negotiated the USMCA to replace the North American Free Trade Agreement, which was established during the Clinton administration in 1994.
At the time the USMCA was implemented, the Trump administration hailed the deal as “the fairest, most balanced and beneficial trade agreement we have ever signed into law.”
But Mr. Trump quickly turned on the pact. America’s trade deficit with Mexico grew, largely because companies moved supply chains away from China and other countries to Mexico after Mr. Trump imposed steep tariffs on those places.
Last year, the U.S. had a $46 billion trade deficit in goods with Canada and a $197 billion deficit with Mexico, according to the U.S. Bureau of Economic Analysis.
A senior administration official on Wednesday said the USMCA modernized the North American trade system but trade deficits “shot up” during the Biden administration.
The official said Mr. Trump reined in those deficits, but the problem remains, and North American partners did not fulfill aspects of the pact to the White House’s satisfaction.
Mr. Trump recently said he planned to let the USMCA expire because American citizens “don’t need anything” from Canada or Mexico.
The senior administration official said the U.S. would meet with Mexican counterparts during the week of July 20 to discuss revisions to the USMCA.
Brian Bryant, who leads the 600,000-member International Association of Machinists and Aerospace Workers, said Wednesday the USMCA included some improvements over NAFTA but did not do enough to protect American workers.
“Workers are still watching their jobs leave. Manufacturing jobs continue to move south of the border. Companies continue to exploit massive wage disparities between the United States and Mexico. The same broken incentives remain in place,” he said. “The mandatory six-year review of USMCA presents an opportunity to finally fix what is broken.”
Contact the author
Please read our comment policy before commenting.