The United States has killed the automatic 16-year extension of the US-Mexico-Canada Agreement (USMCA), forcing the three nations into annual negotiations and setting a ten-year countdown towards the deal’s potential expiry in 2036.
A senior US official confirmed the administration “chose not to rubber stamp a USMCA renewal without addressing existing issues,” adding that “the United States did not agree to renew the USMCA in its current form.” The decision means the trilateral pact, which underpins around $2tn (£1.5tn) in trade each year, will now face yearly reviews instead of remaining in place until 2042.
“US blocks 16-year North American trade deal renewal, triggering annual reviews and a decade-long countdown to expiry.”
Under the USMCA’s original terms, unanimous agreement on an extension would have locked the deal in for another 16 years. Without it, the agreement enters a rolling review cycle that can lead to termination as early as 2036.
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.
But Washington has consistently raised concerns that the deal needs major changes. US trade officials want to renegotiate automotive rules of origin, dairy market access, and prevent third-party countries like China from exploiting the regional agreement. The official warned that if the countries fail to unanimously agree to renew, “it essentially sets a ten year shot lock to termination.”
Business groups across the continent had called for the pact to be extended, warning of the damage uncertainty could cause. The US Chamber of Commerce had previously cautioned that sectors such as manufacturing and agriculture rely heavily on cross-border certainty.
However, US domestic trade groups have welcomed the shift. The American Iron and Steel Institute and the Steel Manufacturers Association argued that annual reviews give American negotiators leverage to fix parts of the deal they see as flawed.
While the free trade deal remains in place for now, the lack of a long-term commitment has created fresh economic uncertainty across North America. All three countries must now decide whether to reach a renewed agreement — or let the ten-year clock run down.