The United States has formally declined to extend the Canada-United States-Mexico Agreement (CUSMA), triggering the next phase of the trade pact’s review process but leaving the agreement fully in force as negotiations continue.
The decision, announced by the Trump administration following a trilateral meeting with Canadian and Mexican officials, was widely expected. While Washington opted not to support an extension beyond the agreement’s current 2036 expiry date, it has not issued the six-month withdrawal notice that would begin the process of exiting the pact.
Instead, U.S. Trade Representative Jamieson Greer said the administration intends to negotiate changes to address what it considers shortcomings in the agreement, including trade deficits with Canada and Mexico.
“The agreement remains in force pending resolution of these issues or until the agreement’s termination,” Greer said.
Trade experts say the White House is unlikely to abandon CUSMA altogether, citing strong support for the agreement among Republican lawmakers, particularly those representing agricultural states that benefit from North American trade.
Rather than pursuing a full renegotiation immediately, U.S. officials suggested Washington could negotiate separate bilateral “protocols” with Canada and Mexico to amend specific parts of the agreement.
The Trump administration indicated those side agreements would focus on reducing U.S. trade deficits, although officials acknowledged it remains uncertain whether common ground can be reached.
Canada has signalled it is open to that approach.
Canada-U.S. Trade Minister Dominic LeBlanc said Ottawa is prepared to hold bilateral discussions with Washington alongside the broader CUSMA review process.
Among the United States’ reported priorities are increasing North American and U.S.-made content requirements for automobiles and securing greater access to Canada’s dairy market.
Canada, meanwhile, is expected to continue pressing for relief from U.S. tariffs on Canadian steel, aluminum and automobiles, though American officials stopped short of indicating whether tariff reductions are under consideration.
Trade analysts caution that negotiations may prove difficult if Washington seeks major concessions without offering significant compromises in return.
With the July 1 review deadline now passed, there is no fixed timeline for completing negotiations.
Some observers believe the Trump administration may seek progress before the U.S. midterm elections, while others expect talks to extend into 2027 given the complexity of the outstanding issues.
Under CUSMA’s review mechanism, the three countries can continue negotiating annually until the agreement’s scheduled expiry in 2036 if no extension is reached sooner.
Despite the uncertainty, all three governments have indicated they intend to continue negotiations in hopes of reaching a revised agreement before that deadline.
