U.S. Won’t Renew USMCA, Seeks Improvements in Yearly Reviews

Reuters’ David Lawder reported that “the Trump administration has ​declined to extend the U.S.-Mexico-Canada Agreement. The decision starts a decade-long clock to wind down the trade deal as it seeks changes to try to reshore manufacturing jobs and reduce U.S. trade deficits ‌with its North American neighbors.”

The decision was announced after a six-year review of the North American free trade zone. It keeps the agreement in place for another 10 years with annual reviews before it expires, unless the three countries agree to renew it with changes. “The United States did not agree to renew the USMCA in its current form,” U.S. Trade Representative Jamieson Greer said in a statement. “As a result, the USMCA is not renewed. The United States will continue to engage with Mexico and Canada to address the agreement’s shortcomings ​and our trade deficits with these countries.”

“The U.S. decision was widely expected, as Greer said that more time was needed to address problems with USMCA, including persistent and growing U.S. goods trade deficits with Mexico and Canada that reached $197 billion ‌and $48.3 billion in ⁠2025, respectively. Much of the deficit with Canada is driven by oil imports, while the deficit with Mexico has grown as companies shifted supply chains away from China in response to U.S. tariffs on Chinese goods.”

Progressive Farmer’s Jake Zajkowski reported that “farm organizations across North America (had been) urging an early renewal. The Agriculture Coalition for USMCA submitted a letter to President Donald Trump signed by 2,376 farmers after nearly 350 organizations from the three countries issued a similar appeal, arguing an early commitment would provide market certainty.”

Agri-Pulse’s Olivia M. Bridges reported that “the USMCA isn’t free of disputes. One of the so-called ‘shortcomings’ pertains to a provision of the USMCA that directs Canada to provide new and expanded access for U.S. exports of milk, cheese, cream, skim milk powder, condensed milk and yogurt through a tariff-rate quota allocation. The dairy industry says Canada has not fulfilled its obligations, necessitating additional negotiations.”

Progressive Farmer’s Zajkowski reported that “produce seasonality remains one of agriculture’s biggest unresolved trade disputes heading into the USMCA review. Growers in Florida and Georgia want changes that would make it easier for seasonal and regional producers to bring antidumping cases, while others are seeking tariff or quota relief to protect domestic markets.”

“According to USDA, Mexico supplies about 51% of U.S. fresh fruit imports and 69% of fresh vegetable imports by value, making the issue especially significant for U.S. produce growers.”

Reuters’ David Shepardson reported that “the six-year-old United States–Mexico–Canada Agreement and ​its predecessor pact ​have created a ⁠highly integrated North American economy, underpinning nearly $1.6 trillion in annual trilateral trade, but its future hinges on negotiations over the ​coming months.”

Mexico has been the top U.S. trading partner since 2023 and some 80% of Mexican exports go to ⁠the ​United States, while nearly 70% of Canada’s exports ​head to its southern neighbor. Mexico and Canada import nearly one-third of exported U.S. goods.

Since the USMCA was enacted, the value of ag exports to Canada and Mexico has increased by 47% compared to only 18% for the rest of the world sector. Mexico and Canada remain the top two overall markets for U.S. agricultural exports. At the same time, agricultural trade between the three countries still makes up the bulk of the U.S. agricultural trade deficit at $24.5 billion last year.

A new Purdue University study also showed the USMCA has saved U.S. households roughly $700 per year in food costs, mainly due to lower tariffs.

EDITOR’S TAKE:

As we have noted in past coverage of the USMCA, it is not without its quirks and issues. That said, most agricultural groups signed on to the idea that it should be renewed. The Trump Administration is taking a different approach, which may put us in a better negotiating position, only time will tell. As the article clearly points out, our economies are very integrated and intertwined. It is difficult to imagine that we will simply end the agreement in ten years. We expect to see some tough negotiations in the coming months, or even years, but we will put our money on a stronger agreement somewhere down the road that strengthens the relationships even further. We will continue to watch and report on this important ag issue.

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