US Set to Skip USMCA Renewal

Washington widely expected to decline a 16-year extension of the USMCA pact, as the trade officials from the three countries are expected to meet on Wednesday for the mandatory joint review of the U.S.-Mexico-Canada Agreement.

The review is built into Article 34.7's "sunset clause," which set a 16-year initial term when USMCA replaced NAFTA on July 1, 2020.

Failure to confirm renewal triggers annual reviews for up to a decade rather than immediate termination.

If no extension is agreed, the agreement would lapse on July 1, 2036.

Sunset Clause Sets a Long Clock

The pact covers a market of more than 500 million people and underpins roughly $1.6 trillion in annual trade.

Short of outright withdrawal, non-extension would instead trigger a decade of annual reviews before the pact's 2036 expiry.

"I'm Not Looking for My Pen"

Canadian Prime Minister Mark Carney told reporters he does not expect an agreement this week:

"I'm not looking for my pen." He added that Canada's "priority is to get a new deal" and that the country is "ready to negotiate an improvement of this agreement."

Trump has separately said he sees the deal "expiring immediately."

Auto Content Rules Divide Washington and Mexico City

In talks with Mexico, the U.S. has pushed for 50% U.S.-specific content in autos, which would raise required regional content to 82% for tariff benefits, according to sources familiar with the negotiations.

A Mexican official said the two sides have also discussed a universal 15% global auto tariff, with a lower rate for USMCA-compliant vehicles.

Tariffs Already Reshaping Trade Flows

The U.S. has separately imposed 25% tariffs on Canadian and Mexican autos and parts and 50% on steel and aluminum, prompting Canadian retaliation.

A late-2025 Ipsos survey for the Chicago Council on Global Affairs found 75% of Americans view USMCA as beneficial.

A third round of formal U.S.-Mexico talks is set for the week of July 20, while Canada has yet to hold formal negotiating rounds with Washington.

Trump Privately Floats a Full Exit

Earlier this year, Trump was reported to consider withdrawing from USMCA altogether, asking aides why the U.S. shouldn't exit the pact he signed into law in 2020, though he has not made a final decision.

A separate withdrawal clause in the agreement allows any party to exit with six months' notice, independent of the ongoing review process.