US opts not to renew North American trade deal with Mexico, Canada

The US has decided not to renew its trade agreement with Canada and Mexico though the deal will still remain in effect for up to 10 years, until a country decides to leave it.

But now it will be reviewed every year after the US missed a deadline to extend it.

The Trump administration has launched the process to renegotiate the agreement.

Washington wants stricter rules for automobiles and industrial goods, higher US manufacturing content, and measures to reduce trade deficits while limiting China’s access to North American supply chains. In 2025, the US recorded goods trade deficits of $197 billion with Mexico and $48.3 billion with Canada.

Mexico and Canada have agreed to continue negotiations, although differences remain over tougher auto manufacturing requirements.

Business groups and farmers support keeping USMCA intact, warning that major changes could increase vehicle prices, disrupt supply chains, and affect the $1.6 trillion in annual trade across North America.