US Rejects USMCA Renewal as Is, Pushes for Changes

A US official said the administration will not renew the United States-Mexico-Canada Agreement in its current form. The United States will continue to engage with Mexico and Canada to address what the official called the agreement's shortcomings and trade deficits with those countries.

The USMCA remains in force pending resolution of those issues or until the agreement's termination, the official said. The US Trade Representative will continue to consult with Congress and the public on changes to the pact.

President Donald Trump has already altered the USMCA through new tariffs and trade policies since taking office. The official said it is possible to improve the situation through negotiations.

The statement adds a layer of uncertainty to North American trade relations. The Mexican peso and Canadian dollar have moved on USMCA headlines in recent months, and traders expect continued sensitivity to any news from the talks.

What would reduce the risk is a clear path to renegotiation with concrete concessions from all three sides. A framework that addresses US concerns over trade deficits while preserving market access for Mexico and Canada would calm currency markets and support supply-chain planning.

What would make the situation worse is a breakdown in talks that leads to the agreement's termination. That outcome would revive tariffs and non-tariff barriers, hitting auto manufacturing, agriculture, and cross-border services. The peso and loonie would likely weaken sharply on such a scenario.

For now, the agreement stays in place. The next concrete marker is the USTR's consultation process with Congress, which will signal the administration's priorities and the likely timeline for any renegotiation.