MEXICO CITY — U.S. and Mexican trade officials met in Mexico City in 2026 to renegotiate the U.S.-Mexico-Canada Agreement (USMCA), excluding Canada from the talks. The negotiations were part of the agreement’s scheduled July 2026 review.

The administration of U.S. President Donald Trump proposed raising the regional value requirement for vehicles to qualify for preferential treatment under the USMCA from 75 percent to 82 percent, with half of that value originating in the United States. Under current rules, 40 percent of “core parts” in passenger vehicles must be made in high-wage jurisdictions—effectively the U.S. or Canada—with a 45 percent threshold for pickup trucks.

U.S. Trade Representative Jamieson Greer plans to negotiate terms with Mexico and present Canada with a take-it-or-leave-it proposition regarding the revised USMCA terms. Greer has stated his intention to maintain some level of tariffs on key Mexican and Canadian goods in the revised USMCA, though preferential tariff rates may be offered.

The exclusion from negotiations follows the Trump administration’s previous imposition of 25 percent tariffs on Canadian and Mexican vehicles and components, and 50 percent duties on steel, aluminum, and copper from those countries in 2025. Currently, vehicles imported from Japan, South Korea, the European Union, and the United Kingdom enter the U.S. at lower tariff rates than those from Canada or Mexico.

Canadian Prime Minister Mark Carney responded by calling for a reimagined partnership with the United States. Speaking at the Economic Club of New York in 2026, Carney advocated for a “true partnership that reimagines cooperation in sectors challenged by global competition.”

Carney warned, “We live in a world where integration has been weaponised,” and emphasized that Canada is diversifying its trade relationships to increase strategic autonomy. He stated, “Our core objective across these partnerships is to increase our strategic autonomy. Because we live in a world where integration has been weaponised. Because a country that cannot feed, fuel or defend itself is not truly sovereign.”

Canada’s economy showed no growth in the first quarter of 2026 on a quarterly basis, following a 1 percent contraction in the fourth quarter of 2025. Tony Stillo, director of Canada economics at Oxford Economics, stated, “Our forecast for growth to ramp up in H2 and through 2027 depends on a favourable USMCA renegotiation, an early end to the Middle East war, and resumption of normal commerce through the Strait of Hormuz.” He added, “The economy faces a potentially bumpy ride ahead.”