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The USMCA trade agreement is scheduled for its first joint mandatory review on July 1, 2026.
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The USMCA agreement came into effect on July 1, 2020.
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The USMCA agreement is slated to expire after 16 years.
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Canada and Mexico have stated they want the USMCA trade agreement to continue.
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The Trump administration has expressed skepticism regarding the continuation of the USMCA.
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If all three countries fail to commit to an extension, the USMCA triggers an annual review process until 2036.
Tony Stillo, director of Canada Economics at Oxford Economics
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"We may get mandatory annual reviews, but that also means that uncertainty prevails, and that’s a negative for decision-making for businesses," said Tony Stillo, director of Canada Economics at Oxford Economics.
Tony Stillo, director of Canada Economics at Oxford Economics
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"It’s a definite dampener, for sure," said Tony Stillo, director of Canada Economics at Oxford Economics.
Vina Nadjibulla, vice president and head of research at the Asia Pacific Foundation of Canada
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"The most likely scenario is that it will go into an annual renewal process," said Vina Nadjibulla, vice president and head of research at the Asia Pacific Foundation of Canada.
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Under the USMCA, any party may give six months’ notice to cancel the trade agreement.
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Donald Trump stated on June 10 that he did not know if he would renew the USMCA.
Donald Trump, US President
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"I don’t know that I’m going to renew it," Donald Trump said on June 10.
Donald Trump, US President
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"We’re talking to them. We’ll see if we do something," Donald Trump said on June 10.
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Donald Trump stated during a visit to Paris that he would rather not have the USMCA agreement but may sign it.
Donald Trump, US President
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"I would rather not have the agreement, but I may sign it," Donald Trump said during a visit to Paris.
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The Trump administration invoked Section 232 of the Trade Expansion Act to impose 50 percent tariffs on Canadian steel, aluminium, and copper.
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The Trump administration imposed 25 percent tariffs on the non-US content of USMCA-compliant automobiles.
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The Trump administration added a 10 percent tax to some lumber products.
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The US Supreme Court ruled in February that tariffs imposed under the International Emergency Economic Powers Act were unconstitutional.
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The White House issued a 10 percent global tariff using Section 122 of the Trade Act following the Supreme Court ruling.
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The Trump administration has threatened to raise the global tariff rate to 15 percent in the coming months.
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The proposed 15 percent global tariffs are currently facing legal challenges.
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The Trump administration has proposed additional tariffs on Canada and Mexico, accusing them of failing to enforce measures to stop forced labour.
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Canada sent nearly 80 percent of its exports to the US until recently.
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North Dakota exported 89.9 percent of its goods to Canada and Mexico last year.
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Michigan exported 64.9 percent of its goods to Canada and Mexico last year.
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Iowa exported 50 percent of its goods to Canada and Mexico last year.
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Arizona exported 39 percent of its goods to Canada and Mexico last year.
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North Dakota, Michigan, Iowa, and Arizona voted for Trump in the 2024 election.
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US exports of auto parts, aircraft, and oil products generated more than $10 billion in sales to Canada and Mexico last year.
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75.6 percent of US exports of parts and accessories for tractors, public transport vehicles, cars, and similar automotive devices went to Canada and Mexico.
Gary Hufbauer, analyst at the Peterson Institute of International Economics
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"There is a danger to US exports on terminating USMCA," Gary Hufbauer told Al Jazeera.
Gary Hufbauer, analyst at the Peterson Institute of International Economics
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"The bigger impact on the US is the disruption of our alliances and friendships around the world. The political side is far larger than the economic one in this," Gary Hufbauer said.
Tony Stillo, director of Canada Economics at Oxford Economics
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"Annual reviews will be ‘a big headwind’," Tony Stillo said.
Tony Stillo, director of Canada Economics at Oxford Economics
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"We are in a much more fractured world. It’s not quite de-globalisation, but we are definitely seeing a breaking down in regional blocs," Tony Stillo said.
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