The US has declined to renew the US-Mexico-Canada Agreement (USMCA) in its current form, according to a senior US official, a decision that robs the trilateral pact of its automatic 16-year extension and sets the stage for annual negotiations until a possible expiry as early as 2036.
The official told the BBC the administration “chose not to rubber stamp a USMCA renewal without addressing existing issues” and that “the United States did not agree to renew the USMCA in its current form”. If the three nations fail to unanimously agree to renew, the official said, “it essentially sets a 10-year shot lock to termination”.
“US declines USMCA renewal, triggering annual reviews and a 10-year countdown to possible expiry in 2036.”
The free-trade deal, which underpins around $2tn (£1.5tn) in trade each year, remains in force for now, but the lack of a long-term commitment injects fresh uncertainty across North American supply chains. Under the original terms, unanimous agreement would have locked the pact in place until 2042. Instead, the US opting out forces the countries to meet every year to negotiate changes — a cycle that could drag on while the clock ticks down.
Washington has consistently raised concerns over rules of origin for automobiles, dairy market access and the risk of third-party countries such as China exploiting the regional agreement. US trade officials are pushing for major changes before committing to a long-term extension.
The friction comes six years after the USMCA entered into force, replacing the 1994 North American Free Trade Agreement (Nafta). It updated rules around digital trade, workers’ rights and regional manufacturing, specifically requiring more vehicle parts to be made within North America.
Business groups across the continent had called for the pact to be extended. The US Chamber of Commerce had warned that sectors such as manufacturing and agriculture relied heavily on cross-border certainty. However, domestic industry groups including the American Iron and Steel Institute and the Steel Manufacturers Association welcomed the shift, arguing that annual reviews would give US negotiators leverage to fix parts of the deal.
The decision — effectively a no to a rubber stamp — leaves the world’s largest free-trade zone in a state of perpetual renegotiation, with the prospect of termination looming a decade from now.