The July 1 deadline for the Canada-U.S.-Mexico Agreement (CUSMA/USMCA) is approaching, with the three countries needing to decide whether to formally extend the agreement for 16 years (until 2042) or continue with annual reviews. Canada and Mexico have both expressed their desire to extend the deal, sending letters to Washington to that effect. However, U.S. President Donald Trump has indicated he is "not looking to renew" the agreement, stating earlier this month that he believes the U.S. would do better without it and that he sees no need for what Canada or Mexico have.
Experts like Greta Peisch, former general counsel for the Office of the U.S. Trade Representative, anticipate the Trump administration will not agree to the extension by July 1. This means the agreement will remain in place for another 10 years before automatically terminating in 2036 if no extension is reached. In the interim, countries will engage in negotiations for possible changes. The U.S. has already commenced bilateral negotiations with Mexico, focusing on agriculture and energy, with a second round of talks held in Washington and a third scheduled for mid-July in Mexico City. Canada has been excluded from these formal bilateral talks but is having informal discussions with the U.S.
Agricultural groups and automakers are pressing for an extension of the USMCA. Agricultural groups seek duty-free farm products, strengthened provisions for genetically modified corn and ethanol access in Mexico, and improved access to Canada's dairy market. Automakers highlight the competitive disadvantage North American auto manufacturing faces without reciprocal trade agreements. The USMCA, which replaced NAFTA, underpins nearly $1.6 trillion in annual trilateral trade, with Mexico being the top U.S. trading partner since 2023. The U.S. had a $46 billion trade deficit with Canada and a $197 billion deficit with Mexico in 2025. If the U.S. does not agree to the extension, the agreement remains active unless one country gives six months' notice to withdraw. The current stance from the U.S. is expected to lead to prolonged uncertainty and potential side deals rather than a straightforward renewal.
