Today is the deadline for long-term renewal of the United States-Mexico-Canada Agreement (USMCA), the trade pact President Trump negotiated himself but now says he’d be fine walking away from entirely.
Representatives from all three countries are set to meet virtually and are expected to announce plans to keep negotiating rather than re-up the agreement for another 16 years. The USMCA sets tariffs to zero on millions of goods traded among the three nations.
“I’m not looking for my pen,” Canadian Prime Minister Mark Carney quipped to reporters on Tuesday. Mexico has called for the pact to be renewed, but the push from America’s neighbors comes as the US has already said more talks are needed.
Trump has meanwhile taken to disparaging the agreement that came into effect during his first term.
“I’m not a big fan of it,” the president said last month. “I would rather not have the agreement, but I may sign it. … We’ll see what happens.”
Trump’s trade representative has already announced plans for another round of talks with Mexico later this month in Mexico City. That came after a June 15-17 meeting in Washington, D.C., ended with a noncommittal joint statement from the US and Mexican teams that they had “advanced discussions.”
The next steps with Canada are unclear, with no direct talks currently scheduled.
That leaves the trade agreement in a limbo of sorts that could stretch for months or even years. The pact is set to enter a period of annual reviews and will expire completely on July 1, 2036, if a new agreement isn’t reached.
“The upcoming review will be a defining test for North American cohesion and, hence, global competitiveness,” the Center for Strategic and International Studies wrote in a recent analysis.
‘Policy uncertainty is extended indefinitely’
The talks are set to span a variety of sectors, from food to machinery to energy to markets for US farmers, as well as non-trade issues such as immigration and drug trafficking, which carry widespread economic and potentially political consequences.
A recent analysis from the Peterson Institute for International Economics identified the 10 US states with the highest relative share of exports to Canada and Mexico, noting that nine of those states voted for Trump in 2024.
But for now, the talks have turned into a nonevent for markets.
“What could have been a rocky spring and summer … has turned into a much less dramatic affair than we anticipated, largely because of the breakout of the war with Iran,” Henrietta Treyz of Veda Partners wrote in a client note.