Why has Trump refused to renew the USMCA, and what will that mean?

US Declines to Renew USMCA, Shifting to Annual Reviews

The United States has announced it will not renew the trilateral trade agreement covering $1.6 trillion of trade between the US, Mexico, and Canada, one day before the agreement was due for its first joint mandatory review. The decision, confirmed by US Trade Representative Ambassador Jamieson Greer, means the USMCA will remain in force but will now face annual reviews instead of the original six-year cycle, according to both Al Jazeera and The Guardian.

The move marks a significant reversal for President Donald Trump, who had championed the agreement as his signature trade deal when it took effect on July 1, 2020, replacing NAFTA. At the time, Trump described the USMCA as the "fairest, most balanced, and beneficial trade agreement we have ever signed into law," as reported by The Guardian.

Coverage Comparison

Al Jazeera's reporting focuses on the procedural announcement, emphasizing the timing of the decision relative to the mandatory review deadline and the immediate plans for bilateral negotiations. The outlet notes that the US will meet Mexico during the week of July 20 for a third round of bilateral negotiations related to the USMCA joint review. It also details the agreement's provisions, including chapters on Digital Trade, Anticorruption, Good Regulatory Practices, and SMEs.

The Guardian's coverage highlights the contrast between Trump's past support for the deal and his current refusal, using language such as "short leash" and "rubber stamp" to describe the shift to annual reviews. The Guardian reports that a senior administration official said Trump "chose not to rubber stamp a USMCA renewal without addressing existing issues." Both outlets confirm that the agreement remains in force while negotiations continue, but The Guardian notes that the annual review structure raises the prospect of damaging businesses that rely on the agreement.

Key Claims

• The US Trade Representative, Ambassador Jamieson Greer, issued a formal statement on Wednesday announcing the US would not renew the agreement "in its current form."
• The statement said the US would "continue to engage with Mexico and Canada to address the Agreement's shortcomings" and that the agreement "remains in force pending resolution of these issues or until the Agreement's termination" on July 1, 2036.
• Trump has repeatedly criticized the agreement, saying in January that there was "no real advantage to it; it's irrelevant," and last month stating, "I don't know that I'm going to renew it," according to Al Jazeera.
• The decision not to renew triggers a six-year review under the "sunset clause" negotiated by Trump, as per the agreement's original design.
• The US cited persistent trade deficits with Mexico and Canada as justification, with Al Jazeera reporting deficits of $197bn and $48.3bn respectively in 2025. Canada is the US's largest crude oil supplier, driving the bilateral deficit, and the deficit with Mexico has grown due to supply chain shifts from China to Mexico.
• Trump has imposed 25% tariffs on cars, 50% on metals, and 10% on lumber, as reported by Al Jazeera.
• Mexican Economy Minister Marcelo Ebrard expressed willingness to resolve differences and protect the automotive industry, and Canadian Minister Dominic LeBlanc committed to addressing tariffs on steel, aluminum, cars, and lumber, according to Al Jazeera.
• The deal governs approximately $2 trillion annually in goods and services between the three countries, as reported by The Guardian.

Perspectives

The United States: The Trump administration frames the non-renewal as a necessary step to address trade deficits and agreement "shortcomings." A senior administration official said the president "chose not to rubber stamp a USMCA renewal without addressing existing issues," as quoted by The Guardian.

Mexico: Mexican Economy Minister Marcelo Ebrard has expressed willingness to resolve differences and protect the automotive industry, signaling a cooperative stance in negotiations, as reported by Al Jazeera.

Canada: Canadian Minister Dominic LeBlanc has committed to addressing tariffs on steel, aluminum, cars, and lumber, indicating a proactive approach to bilateral talks, according to Al Jazeera.

The shift to annual reviews could create uncertainty for businesses dependent on the agreement, potentially limiting investments across North America. As Al Jazeera notes, bilateral agreements may become more important than the trilateral framework as negotiations continue.