The US is not going to renew its USMCA trade agreement with Mexico and Canada.
A statement yesterday (1 July) from US trade representative Jamieson Greer confirmed the country "did not agree to renew the USMCA in its current form".
"The United States will continue to engage with Mexico and Canada to address the Agreement’s shortcomings and our trade deficits with these countries", Greer said.
He added the agreement stays in place "pending resolution of these issues or until the agreement’s termination".
The US and Mexico are heading into a third round of bilateral talks around a review of the trade agreement on 20 July, the statement said.
Last month, President Donald Trump had suggested the US may choose not to renew the USMCA trade deal (also known as CUSMA or T-MEC).
Speaking at the White House in June, Trump criticised trade imbalances with both neighbouring countries and said discussions were ongoing with Canadian and Mexican leaders.
The USMCA, which replaced the North American Free Trade Agreement (NAFTA) in 2020, governs nearly $1.6tn in annual trade among the three countries.
While the US has not agreed to renew the agreement, it still remains in place for another ten years, a statement from Canada's Minister of Internal Trade Dominic LeBlanc said.
He added the agreement "can be renewed at any time for another 16-year period".
LeBlanc said: “We agreed on the importance of continuing our discussions and identifying ways to ensure trade and investment frameworks between Canada, the United States and Mexico continue to support North American prosperity and competitiveness. For Canada, this includes substantive discussions with the United States on addressing sectoral tariffs on Canadian steel, aluminum, autos and lumber."
Reacting to the US decision, Melissa Hockstad, president and CEO of the US Consumer Brands Association said: "Under the review process, the Trump administration has a unique opportunity to elevate an ambitious approach with Mexico and Canada at the table.
"As the Trump administration continues its trade negotiations, we are confident the president and USTR will build on USMCA’s success with an America First position that strengthens North American competitiveness and supports US manufacturing.
"Consumer Brands looks forward to continuing to work with USTR to secure these gains and lock in long-term investment and supply chain certainty for America’s largest domestic manufacturing employer.”
Michael Graydon, CEO, of Canadian industry association Food Health & Consumer Products of Canada, added: "While this outcome was not unexpected, it reinforces the importance of a constructive review process that gives businesses in all three countries the certainty they need to plan, invest, and compete.
"Most importantly, CUSMA remains in force. For Canada’s food, health, and consumer product manufacturers, the agreement protects the tariff-free movement of finished goods, ingredients, inputs, packaging, and equipment across highly integrated North American supply chains ... The work now is to ensure the review process reinforces that certainty, rather than creating new barriers to investment, planning, and cross-border trade.
"As discussions continue, FHCP encourages all three governments to focus on practical outcomes that preserve duty-free access, avoid new tariffs on essential products and manufacturing inputs, and reinforce business certainty."
