US opts against long-term extension
The United States has declined to renew the US-Mexico-Canada Agreement for its automatic 16-year extension, a senior U.S. official told the BBC on Tuesday, saying the administration chose not to "rubber stamp a USMCA renewal without addressing existing issues." The decision keeps the trade deal in place but forces annual review meetings and starts a ten-year countdown toward the pact expiring as early as 2036.
$2 trillion trade at stake
The USMCA underpins roughly $2 trillion in annual trade across North America. U.S. trade officials are demanding changes to automotive rules of origin, better access to Canada's restricted dairy market, and mechanisms to prevent third-party countries like China from exploiting the regional agreement. The U.S. is currently holding formal negotiating rounds with Mexico only, leaving Canada on the sidelines amid bilateral trade irritants including Canadian provinces pulling American liquor from store shelves.
Industry reaction divided
The U.S. Chamber of Commerce had warned that manufacturing and agriculture sectors rely heavily on cross-border certainty. But the American Iron and Steel Institute and the Steel Manufacturers Association welcomed the decision, arguing annual reviews give American negotiators leverage to fix parts of the deal. The USMCA replaced NAFTA in 2020, updating rules around digital trade, workers' rights, and regional manufacturing content requirements.