After declining to extend the USMCA earlier this year, the U.S. is gearing up for the next phase of formal negotiations even as its trade relationships with Canada and Mexico are in drastically different spots.
The U.S. and Canada are currently embroiled in a trade war precipitated by a 50% tariff U.S. President Donald Trump installed on $20 billion worth of Canada imports in August.
While the two countries held talks before the levies went into place, Canada Prime Minister Mark Carney ultimately called back negotiators and implemented retaliatory duties in September. Trump responded by expanding the scope of the 50% tariffs while enacting an import ban on certain alcohol, dairy-related and motor-vehicle imports from Canada.
Meanwhile, the U.S. and Mexico have been consistently engaged in USMCA negotiations dating back to the beginning of the joint review process last year. Representatives from the two countries convened for a third round of bilateral USMCA discussions in late July, while Mexico Economy Secretary Marcelo Ebrard met with USTR Jamieson Greer for an hour on the sidelines of the G20 Trade Ministerial in Milwaukee last week.
“We are getting close (Mexico and the U.S.) on many things. To advance, to get closer on positions, and resolve issues. And we’re on our way, advancing, advancing, advancing.” Ebrard told reporters in Spanish at the conference, per a government press release.
Regardless of the tenure of the countries’ trade relationships, because the three sides did not agree to an extension of the USMCA this year, they must now engage in a joint review process annually until an agreement is reached or the deal expires in 2036. The next review deadline is July 1, 2027.
