USMCA Review: No US Renewal, September Round Now Decisive

Trade: Washington

The USMCA review now heads to a decisive September round in Washington after the United States withheld renewal, leaving North America’s trade pact in force but on an annual clock.

What Happened on July 1

The first mandated joint review of the United States-Mexico-Canada Agreement took place on July 1, 2026, six years after the pact replaced NAFTA. Under Article 34.7, the three partners had to decide whether to extend the deal for another 16 years.

They did not. “The United States did not agree to renew the USMCA in its current form,” US Trade Representative Jamieson Greer said in a statement that day, citing shortcomings in the agreement and US trade deficits with both partners.

Nothing changes overnight. The agreement remains fully in force, with duty-free treatment for qualifying goods untouched. But the review now repeats every year, and without a three-way renewal the pact lapses on July 1, 2036.

A Shrinking List of Demands

Washington and Mexico City have held three bilateral rounds since late May: in Mexico City on May 28-29, in Washington on June 16-17 with agriculture on the agenda, and a third session in the week of July 20.

The work has narrowed the fight. Unresolved US demands fell from 54 items at the start of the cycle to 14, a reduction of nearly three-quarters. Ebrard has said the talks crossed “the vast majority” of the initial list off.

What survives is the hard core: steel and aluminium tariffs, automotive trade terms and the Rapid Response Labour Mechanism, where Mexico’s 13 counter-demands are concentrated. Those are the issues September must settle.

Why the Preference Line Matters

Since March 2025, USMCA eligibility has separated a 0% tariff from a 25% tariff on Mexican goods entering the United States. That single line explains the scramble to comply: USMCA utilization among Mexican exporters reached 85% in January 2026, up from 44.8% a year earlier.

The exposure is largest in food. US agricultural imports from Mexico reached US$48.8 billion in 2024, roughly double the 2016 level, with core export lines such as avocados, tomatoes and beef claiming preference at rates above 99.9%.

A lapse into annual uncertainty does not end that trade, but it makes long-term contracts, plant investments and supply-chain commitments harder to sign. Border manufacturers have already delayed projects while they wait for clarity.

What Mexico Wants

Mexico’s government frames its goal as modernization rather than renegotiation. Its counter-demands push back on US metals tariffs, seek clearer automotive content rules and defend the labor-enforcement mechanism that Washington wants to keep sharp.

Ebrard has characterized the September round in Washington as decisive for preserving Mexico’s competitive position. Mexico can now point to an explicit benchmark: the 10% tariff rate the United States granted the United Kingdom earlier this year.

Greer has signaled a goal of interim agreements with Mexico and Canada by the end of the year, while cautioning that talks could stretch into 2027. Canada, which only recently began preliminary discussions with Washington, is the slower track.

What to Watch Next

Three dates matter now. The fourth US-Mexico round in September, any trilateral session that brings Canada back to the table, and the year-end deadline Greer set for interim deals.

For businesses, the checklist is shorter: revalidate origin certifications issued under 2025 calculations, watch the metals and automotive files, and assume enforcement audits keep rising as utilization surges. Incorrect claims now carry penalties of up to 150% of omitted duties in Mexico.

The pact that governs nearly US$2 trillion in annual North American trade is not dying. But its long-term shape will be negotiated, year by year, until the three capitals agree on what it becomes.

Frequently Asked Questions

Did the USMCA expire on July 1, 2026?

No. The United States declined to renew it in its current form, but the agreement remains fully in force. It now faces annual reviews and would only lapse on July 1, 2036 if never renewed.

What is left to negotiate in the USMCA review?

Fourteen unresolved US demands remain, down from 54. Mexico’s 13 counter-demands center on steel and aluminium tariffs, automotive terms and the Rapid Response Labour Mechanism.

When is the next USMCA negotiating round?

A fourth US-Mexico bilateral round is scheduled for September in Washington. USTR Jamieson Greer aims for interim agreements by year-end, though talks could extend into 2027.

Sources: USTR (joint review statement, 1 July 2026); AS/COA US-Mexico talks tracker; UC Davis Mexican Agricultural Outlook; CSIS.