On July 1, 2026, the United States formally declined to renew the United States-Mexico-Canada Agreement (USMCA, T-MEC, CUSMA, or the Agreement) during the Agreement’s first mandatory joint review meeting. Mexico and Canada had formally indicated their intention to renew the Agreement in the weeks leading up to the meeting. The US decision does not terminate the Agreement. Rather, it triggers the Agreement’s annual review mechanism, under which the parties will meet each year to determine whether the Agreement should be extended before its scheduled expiration in July 2036. Following the meeting, the Canada-US Trade Minister and Mexico’s Economy Secretary requested clarity from the Office of the US Trade Representative on a proposed timeline for the annual review mechanism. The US has yet to outline the proposed structure and timeline.
What North American Businesses Need to Know
- There is no immediate impact on the flow of USMCA/T-MEC/CUSMA-qualifying goods for North American businesses. USMCA/T-MEC/CUSMA preferential tariff treatment remains available for originating goods.
- Section 232 tariffs on certain Canadian and Mexican origin goods (e.g. steel, aluminum, certain derivative steel/aluminum products, forest products, copper) remain in effect, including on USMCA/T-MEC/CUSMA-qualifying goods.
- Canadian surtaxes on US steel and aluminum remain in effect. Canadian remission processes were recently extended until July 1, 2027. Mexico has not implemented retaliatory tariffs.
- Investment uncertainty remains. The US decision signals months of further bilateral and trilateral negotiations, which may result in substantive amendments to the text of the Agreement.
For the full analysis, visit the Baker McKenzie's Global Import Blog.