The Trump administration formally declared on July 1, 2026, that it will not extend the US-Mexico-Canada Agreement (USMCA), activating a decade-long sunset process that could see the 32-year-old North American free trade zone expire on July 1, 2036.
The decision triggered a six-year review session under a sunset clause built into the agreement during Trump’s first term. However, the move does not immediately dismantle the trade pact. Goods that meet the agreement’s rules will continue to cross duty-free, and the agreement remains fully in effect unless the three countries fail to agree on an extension over the next decade of annual reviews.
Trade chiefs from the US, Mexico and Canada met virtually on Wednesday to declare whether they want to extend the pact for another 16 years. Mexico’s President Claudia Sheinbaum signed a letter calling for a 16-year extension, while Canadian Prime Minister Mark Carney expressed readiness to negotiate improvements. Washington, however, held firm.
Key sticking points include sweeping US demands for tighter automotive content rules, requiring that 50% of a North American-built vehicle’s content be US-specific, and trade protections to block Chinese goods from benefiting from USMCA provisions. Failure to reach agreement on revisions would keep the trade pact in indefinite limbo, with annual review sessions for the next 10 years.
Trump, who originally negotiated USMCA to replace NAFTA in 2020, has grown increasingly hostile to the agreement, preferring tariffs over free trade. He has already imposed 25% duties on Canadian and Mexican autos and 50% on steel and aluminium, effectively undermining the deal’s duty-free framework.
