The US has declined to renew the US-Mexico-Canada Agreement (USMCA) in its current form, a senior US official confirmed, setting the stage for annual rolling reviews and a countdown to the pact's possible expiry by 2036.
The decision means the trilateral trade pact, which underpins around $2tn (£1.5tn) in trade each year, will miss out on an automatic 16-year extension that would have kept it in place until 2042.
“US blocks 16-year USMCA renewal, forcing annual reviews and a 10-year countdown to possible expiry by 2036.”
The official said 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 countries fail to reach unanimous agreement, "it essentially sets a 10-year shot lock to termination", the official added.
Washington is pressing for major changes, including on rules of origin for automobiles, dairy market access and stopping third-party countries like China from exploiting the regional deal. The friction comes six years after the USMCA entered into force, replacing the 1994 North American Free Trade Agreement (Nafta). It updated rules on digital trade, workers' rights and regional manufacturing, requiring more vehicle parts to be made within North America.
The lack of a long-term commitment creates fresh economic uncertainty across the continent. The US Chamber of Commerce had warned that sectors such as manufacturing and agriculture relied heavily on cross-border certainty. But US domestic trade groups, including the American Iron and Steel Institute and the Steel Manufacturers Association, welcomed the shift, arguing annual reviews would give US negotiators leverage to fix parts of the deal.
Now the nations must meet every year to negotiate changes, with the deal facing a 10-year countdown towards expiration as early as 2036.