US, Canada and Mexico likely miss deadline to extend trade pact

The July 1 deadline for the United States, Canada and Mexico to agree on extending USMCA for another 16 years would not end the pact outright but would keep businesses, investors and regulators in another round of uncertainty.

USMCA entered into force on July 1, 2020, replacing NAFTA, and Article 34.7 built in the first formal joint review ever included in a U.S. free trade agreement. If the three governments agree in the 2026 review, the pact runs for 16 more years, to 2042. If they do not, the agreement stays alive under annual reviews and would not terminate unless no extension is later agreed by July 1, 2036. Canada and Mexico have already sent letters to Washington seeking a 16-year extension, and President Donald Trump is not looking to renew it.

USMCA covers duty-free trade across a market of more than 500 million people and about 30% of global GDP. North American goods and services trade was estimated at $1.93 trillion in 2024.

The review clause was controversial from the start. Some lawmakers warned that a built-in sunset-style provision would create uncertainty for private investment, while Robert Lighthizer, then the U.S. trade representative, argued it would provide greater oversight. Congress approved the implementing legislation in December 2019 and January 2020.

The Office of the United States Trade Representative has already published public consultation and hearing notices ahead of the July 2026 review, and the governments of Mexico and Canada have also solicited public comments. Three broad outcomes are on the table: a renewal with targeted revisions, a shift to annual reviews if the three sides cannot agree, or, in a more severe break, movement toward bilateral arrangements and eventual termination in 2036. Tariffs the United States has imposed this year on Canadian and Mexican imports have added another layer of strain, especially for auto supply chains and industries dependent on steel and aluminum.